Levy of Customs duty on notional interest on advance payments made to the foreign supplier/parties on import of goods

Customs Duty on Notional Interest from Advance Payments Under Review; Importers Can Clear Goods with Bond.

The circular addresses concerns from importers about the levy of customs duty on notional interest from advance payments to foreign suppliers for imported goods. Importers have reported delays in consignment clearance due to customs authorities demanding duty on this notional interest. The Central Board of Excise & Customs is actively considering whether interest charges should be included in the assessable value for customs duty. Meanwhile, consignments should not be delayed; they can be cleared if importers execute a bond with sureties for the differential duty amount to protect government revenue.