Budget 2018 - Widening the ambit of Advance Rulings under Customs

February 07,2018
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Rashmi Kedia, Partner, Reina Legal
Mudita Bhadani, Associate

One of the crucial changes proposed in the Union Budget, 2018 is broadening the scope of advance rulings under the Customs Act, 1962 (‘the Act’).

Where appointing a separate Customs Advance Ruling Authority with Appellate mechanism is a welcome measure, the changes proposed in the definitions of ‘applicant’, ‘advance rulings’ etc. would also result in expanding the ambit of advance ruling provisions.

On a close analysis, it can be observed that the proposed amendments with respect to Customs advance ruling are in line with the advance ruling provisions under the GST laws, particularly the ones relating to the appellate mechanism.

For a wholesome discussion, key advance ruling provisions under the Customs law along with the changes proposed in the Union Budget 2018 are explained herein below.

What is Advance Ruling?

As per the existing provisions, the Act defines advance ruling to mean the authoritative determination of liability to pay duty in relation to an activity which is proposed to be undertaken by the applicant.[1]

The Finance Bill 2018 (‘the Bill’) has proposed to amend the definition of “advance ruling” to mean a written decision on any of the questions referred to in section 28H raised by the applicant in respect of any goods prior to its import or export.[2]

This signifies that advance ruling can now be sought only prior to the import/export of goods.

It is relevant to point out that under the GST laws, “advance ruling” may be obtained in respect of specified questions, in relation to the supply of goods or services being undertaken or proposed to be undertaken by the applicant.


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