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CUSTOMS (FINALISATION OF PROVISIONAL ASSESSMENT) REGULATIONS, 2025

DR.MARIAPPAN GOVINDARAJAN
Customs Finalisation Regulations 2025: timelines for provisional assessments, document production, payments, bonds, recovery, and penalties The new Customs (Finalisation of Provisional Assessment) Regulations, 2025 govern provisional customs assessments pending or commenced after 12.09.2025, requiring the importer or exporter to produce requested documents within two months (extendable by two months and further by higher authority up to 14 months) and allowing finalisation within three months of receipt or enquiry completion, with a hard outer limit of two years except where specified suspensive reasons apply. Importers/exporters may voluntarily pay duties pending finalisation (subject to interest) and must pay any deficiency after adjustment; bonds and securities are releasable or recredited post-finalisation. Unpaid sums may be recovered from security after 90 days; penalties apply for contraventions. (AI Summary)

Provisional assessment of duty

The Customs Act, 1962 (‘Act’ for short) provides for the importer or exporter to pay the customs duty on self-assessment basis.  Section 18 of the Act provides that –

  • The importer or exporter is unable to make self-assessment under sub-section (1) of section 17 and makes a request in writing to the proper officer for assessment; or
  • where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test; or
  • where the importer or exporter has produced all the necessary documents and furnished full information but the proper officer deems it necessary to make further enquiry; or
  • where necessary documents have not been produced or information has not been furnished and the proper officer deems it necessary to make further enquiry, 9[the proper officer may assess the duty leviable on such goods, provisionally,if the importer or the exporter, as the case may be, furnishes such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty as may be finally assessed or re-assessed, as the case may be and the duty provisionally assessed

New Regulation

The Central Board of Indirect Taxes and Customs made, vide Notification No. 55/2025-Customs (N.T.), dated 12.09.2025, a new Regulation called as ‘Customs (Finalisation of Provisional Assessment) Regulations, 2025, (‘Regulations’ for short) in supersession of the Customs (Finalisation of Provisional Assessment) Regulations 2018.  These regulations came into effect on 12.09.2025.

These regulations provide for the applicability of these regulations, time limit for submission of the documents by the importer or exporter, time limit for conduct of enquiry, payment of duty by importer or exporter on his own assessment before finalisation of provisional assessment, time limit for finalisation of provisional assessment, manner of finalisation of provisional assessment, extension of time for provisional assessment and manner of closure subsequent to final assessment.

Application

 These regulations apply to any provisional assessment pending on the date of enforcement of these regulations i.e., 12.09.2025 or assessed after the enforcement of these regulations.

Time limit for submission of documents

The provisional assessment is made by the proper officer if the importer or exporter does not provide any documents/information as required by the proper officer.  In such condition, the proper officer shall finalise the provisional assessment within 15 days from the date of provisional assessment.  Further, before the finalisation, the proper officer shall inform the importer or exporter, in writing, seeking specific documents or information to be produced by the importer or exporter to the proper officer. 

The importer/exporter shall produce the documents or furnish the information to the proper officer within 2 months from the date of requisition from the proper officer.  If the said documents are not made available the proper officer may extend the time limit for production of documents/information, for a further period of 2 months.  The higher authority, above to the proper officer, may extend the said time limit for any period but not exceeding 14 months from the date of provisional assessment.

Submission of documents

The importer/exporter shall produce the documents/information as required, before the Proper Officer within 2 months from the date of requisition.  If the said documents/information are not made available the proper officer shall proceed to finalise the provisional assessment based on the documents available on the record.

The time limit for submission of documents or conclusion of enquiry for the cases pending provisional assessment as on 29.03.2025 the same  shall be reckoned from 29.03.2025.

Conducting of enquiry

If the provisional assessment is made on the plea of the proper officer that further enquiry is to be conducted, then the officer of the Customs shall complete the enquiry and transfer the enquiry report along with the documents to the proper officer for the finalisation of the provisional assessment.  Where any document or information is required during the enquiry, the proper officer may seek such details within the time prescribed. 

Payment of duty on own assessment

The importer or exporter, may pay any amount electronically against the bill of entry or shipping bill on his own ascertainment, during the pendency of the provisional assessment, which shall be adjusted against the duty finally assessed or reassessed.

The importer or exporter is also liable to pay interest, on the above amount so paid voluntarily, consequent to the final assessment order or re-assessment under Section 18 of the Act.

Time limit for finalisation of provisional assessment

The proper officer shall finalise the provisional assessment within 3 months of receipt of documents or information from the importer of exporter or after conclusion of enquiry which is made for the purpose of finalisation of provisional assessment.

If the proper officer is unable to finalise the provisional assessment, then any officer to whom the proper officer is subordinate, may allow further time of 2 months, after recording the reasons for such extension.  At any cost the provisional assessment shall be finalised within 2 years from the date of provisional assessment. 

In case of non-finalisation

If the proper officer is unable to assess the duty within two years for the reasons that-

  • An information is being sought from an authority outside India through a legal process; or
  • an appeal in a similar matter of the same person or any other person is pending before the Appellate Tribunal or the High Court or the Supreme Court; or
  • an interim order of stay has been issued by the Appellate Tribunal or the High Court or the Supreme Court; or
  • the Board has, in a similar matter, issued specific direction or order to keep such matter pending; or
  •  the importer or exporter has a pending application before the Settlement Commission or the Interim Board,

the proper officer shall inform the importer or exporter concerned, the reason for non-finalisation of the provisional assessment and in such case, time of two years for finalisation of assessment done provisionally, shall apply not from the date of provisional assessment but from the date when such reason ceases to exist.

Finalisation of provisional assessment

The finalisation of provisional assessment shall be done in accordance with the provisions of Section 18(2)  of the Act.  If the final assessment confirms the provisional assessment, the proper officer shall finalise the same after ascertaining the acceptance of such finalisation from the importer or the exporter on record and inform the importer or exporter in writing of the date of such finalisation.   The importer or exporter is to pay the deficiency of the amount finally assessed or re-assessed, as the case may be, after adjustment of the amount already paid, the bill of entry or the shipping bill may be returned for payment of the amount.  The importer or exporter is also liable to pay interest, on the above amount so paid, consequent to the final assessment order or re-assessment order. 

If the final assessment is contrary to the provisional assessment, the proper officer shall pass a speaking order following principles of natural justice. 

On the finalisation of the provisional assessment, the Bond executed at the time of provisional assessment with security, if any, shall be cancelled or recredited, as the case may be, and the security shall also be returned, if there are no pending dues.

If the importer or exporter is entitled to a refund, after the finalisation of provisional assessment, the refund shall be processed in terms of sub-sections (4) and (5) of section 18 of the Act.

Non payment of duty after finalisation of provisional assessment

Where the duty, interest, fine, penalty or any other sum due has not been paid for more than 90 days, which is due to be paid after the finalisation of the assessment of the Act and the sum due has attained finality for recovery, then the sum due which remains unpaid shall be adjusted from the security, if any, obtained at the time of provisional assessment, or shall be recovered as the sum due, including the amount of interest to the Central Government by the proper officer in accordance with the provisions of section 142 of the Act, under intimation to the importer or the exporter.

Penalty

The importer or exporter or his authorised representative or Customs Broker who contravenes any of the provisions of these regulations or abets such contravention, or fails to comply with any provisions of these regulations, shall be liable to a penalty to an extent of the amount provided under clause (ii) of sub-section (2) of section 158 of the Act, without prejudice to any other action which may be taken under the Act, rules or regulations made thereunder or under any other law for the time being in force.

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