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PPT   mr sivarajan bmr
PPT   mr sivarajan bmr
PPT   mr sivarajan bmr
PPT   mr sivarajan bmr
PPT   mr sivarajan bmr
PPT   mr sivarajan bmr
PPT   mr sivarajan bmr
PPT   mr sivarajan bmr
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PPT mr sivarajan bmr


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  • 1. Challenge UsCUSTOMS SELFASSESSMENT AND ONSITEPOST CLEARANCE AUDITJanuary 31, 2012 All rights reserved | Preliminary & TentativeK Sivarajan l DirectorBMR Advisors 1
  • 2. CONTENTSSelf AssessmentOn-site Post Clearance AuditAuthorized EconomicOperator All rights reserved | Preliminary & TentativeSELF ASSESSMENT All rights reserved | Preliminary & Tentative 2
  • 3. SELF ASSESSMENT – TRADE FACILITATION Trust based Customs Trade Partnership Assured facilitation for compliant importers/exporters Trade Facilitation Control the interdiction in RMS and comprehensively rationalize various interventions, targets, rules Reducing pre-clearance checks based on risk parameters in case of self assessed documents Facilitation target of 80% for Air Cargo Complexes, 70% for Seaports and 60% for ICDs to be achieved in short span Faster Clearance of goods Reducing dwell time of goods at customs port All rights reserved | Preliminary & Tentative Reducing transaction costs of import/export Self Assessment Manual Standard Operating Procedures Compulsory compliance requirements Key aspects of customs (Classification, valuation, exemption etc) India Customs Update | 5SELF ASSESSMENT – KEY ELEMENTS COMPLETION OF SELF ASSESSMENT Bill of Entry / Shipping Bill shall be deemed to have been filed and Self self-assessment of duty completed when, after entry of the Assessment electronic declaration in the Indian Customs Electronic Data Interchange System either through ICEGATE or by way of data entry through the service centre, a bill of entry number/shipping bill number is generated by the Indian Customs Electronic Data Interchange System for the said declaration All rights reserved | Preliminary & Tentative India Customs Update | 6 3
  • 4. SELF ASSESSMENT – KEY ELEMENTS KEY ELEMENTS Description of goods – brand, grade, specifications etc Self Assessment Classification of goods – HSN (amendment from Jan 1, 2012) Levy of duty/cess – Applicable duties, exemption notifications (conditional), project imports etc Valuation of goods Licensing for imports/exports – Foreign Trade Policy Benefits under Export Promotion Schemes Benefits of Free Trade Agreement and country of origin norms All rights reserved | Preliminary & Tentative Online filings GATT Declaration INTERNAL PROCESSES CHA capabilities and coordination Customs / logistic team capabilities Systems, processes, records maintenance India Customs Update | 7SELF ASSESSMENT - PROCESS FLOW Self assessed BOE Computerized risk profiling & Risk based intervention / verification Risks observed by RMS RMS Facilitated BOE Re-Assessment by Customs Assessment accepted On site Post Clearance Payment of duty Audit / No O-in-O Assessment All rights reserved | Preliminary & Tentative is challengedAudit Para / Show Investigation by Speaking order Cause Notice SIIB Review / Appeal India Customs Update | 8 4
  • 5. ON-SITE POST CLEARANCE AUDIT All rights reserved | Preliminary & TentativeON-SITE POST CLEARANCE AUDIT (‘OSPCA’) To verify completeness and accuracy of assessment claims based on:Background Financial data, Commercial data Logistics and inventory data etc Statistical analysis of the data – trend, outliers, average etc Document based audit for the entity at importer’s location Operational for ACP clients from October 1, 2011 Audit to be conducted by: All rights reserved | Preliminary & Tentative Audit wing of LTU – If registered with LTU Central Excise Commissionerate – Other Units OSPCA to be done simultaneously with Central Excise/ Service Tax Audit Current audit procedure (Excise Audit – 2000) to apply India Customs Update | 10 5
  • 6. KEY DEFINITIONS UNDER PCA REGULATIONS Audit “Audit” means examination of bills of entry, shipping bills, invoices, packing lists, import licences, books of account, and other records of transaction relating to imported and export goods, and may include inspection of goods at the premises, if available and where necessary, drawal of samples Books of account “Books of account” includes ledgers, day-books, cash books, account-books and other accounts whether kept in the written or printed form and data stored on a floppy, disc, tape or any other form in electro-magnetic data storage device All rights reserved | Preliminary & Tentative Premises “Premises” includes the place at which imported or export goods and connected books of account, records of transaction and other documents are ordinarily kept by an importer or exporter, as the case may be, and his registered office or the premises indicated in his Importer Exporter Code (IEC) issued by the Ministry of Commerce and Industry and the places wherever the imported or export goods, as the case may be, are ordinarily kept India Customs Update | 11CHANGE – AUDIT INFORMATION WINDOW On site Audit – Expanded Information window Import information Financials, book of accounts, Foreign currency remittance Import information Production / Inventory / End Use Invoice, Packing list Insurance, Freight, Product information Commercial, Transfer Pricing All rights reserved | Preliminary & Tentative Other regulatory filings, MIS, Management books etc Electronic data – mails, ERP etc CUSTOMS ASSESSMENT / AUDIT ONSITE AUDIT Pre April 2011 Post April 2011 India Customs Update | 12 6
  • 7. AUDIT PROCESS Key Elements OSPCA at the premises of Importers and Exporters AUDIT Minimum 15 days notice for audit Obtain prior information if required Visit the premises to gather information, if necessary Conduct the audit in the premises of the importer/exporter Inspect the goods if available during Audit Take samples of goods and copies of relevant documents to verify correctness of assessment of duty All rights reserved | Preliminary & Tentative Audit objections and opportunity Draft Audit Report Voluntary payment basis draft audit findings India Customs Update | 13AUDIT OBLIGATIONS Obligations of Importers/exporters for the purpose of Audit Make available in a timely manner the books of account, records of Obligations transaction and other relevant documents maintained relating to the imported or export goods as required by the proper officer For a period of five years from the date of import/export Provide true and correct information to the proper officer Render assistance to the proper officer in the discharge of his official duty and shall in no case refuse or obstruct the proper officer in discharge of official duty Failure to comply with these regulations – Penalty up to INR 50,000 All rights reserved | Preliminary & Tentative India Customs Update | 14 7
  • 8. AUDIT CAPABILITIES AUDIT CAPABILITIES Ability to capture and document classification / valuation and other Capabilities import related positions taken by the importer at the time of self assessment Ability to quickly produce relevant documents at the time of audit Ability to represent and articulate the tax positions and defend the self assessment before the audit team. This would mean change in skill set of importer’s employee responsible for customs audit Better understanding of the rights and obligations of the importer and the Customs audit party Better understanding of customs laws and procedures and ability to All rights reserved | Preliminary & Tentative represent the case before the Audit party Ability to take decisions on accepting or challenging contrary views of the Customs Audit party India Customs Update | 15 All rights reserved | Preliminary & Tentative Challenge Us 8