CBIC postpones second phase of electronic customs payment

As the Electronic Cash Ledger feature for customs payments faced issues after it was launched earlier this month, the Treasury Department has decided to delay the next phase of the project by two months to June 30. The phase should start on May 1st.

Accordingly, the Central Board of Indirect Taxes and Customs has granted a three-month exemption from payments related to baggage and international courier shipments from the ECL facility.

The exemption, which lasted until April 30, was not extended until June 30, according to a CBIC release.

The exemption would apply to goods imported or exported at customs posts where no automated customs system is in place; Goods imported or exported at international courier terminals and accompanied baggage.

Introduced on April 1st, the ECL is an automated payment system that allows users to keep interest-free deposits for paying taxes. However, for the first few days after its launch, disruptions ensued, with export-import traders complaining that they could not make payments.

While the CBIC recently said the system is now “moving towards normality,” users said it would still take some time before it was fully operational.

“The system is not fully stabilized and courier imports are urgent imports. Therefore, any delay will cause high cost and defeat the purpose of courier lifting. A pragmatic decision,” said Ajai Sahai, Director General and CEO, Federation of Indian Export Organisations.”

Ankur Gupta, Practice Leader (Indirect Tax), SW India said the intention seems to be to streamline the ECL mechanism and make it available in all ports of India so that importers would not face any challenges in clearing the goods. “Furthermore, the expansion of courier and baggage exemption aims to streamline clearance and could be included as a second phase once ECL is smoothly implemented in other areas,” he said.

In the early days of its launch, the CBIC had waived the ECL’s payment of tariffs as an interim measure on interest, and subsequently stated that this exemption would last for three days until the system stabilized.

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