To fast-track finalisation of the provisional assessment of the Bill of Entry, Finance Act, 2025, amended Section 18, dealing with provisional Assessment, of the Customs Act, 1962. Amended Section 18 came into effect from 29th March, 2025.
In furtherance of Section 18 of The Customs Act, 1962,the CBIC notified the Customs (Finalisation of Provisional Assessment)Regulations, 2025 vide No. 55/2025-Customs (N.T.) dated 12th September, 2025and issued circular No. 22/2025-Customs on 12th September, 2025 clarifying Implementation of Customs (Provisional Assessment) Regulations, 2025.
This article discusses the brief changes made in provisions related to the Provisions Assessment of Customs:
● A time limit of two years for the finalisation of the provisionalassessment of the Bill of Entry has been provided.
● Such a time limit shall be extended by the PrincipalCommissioner of Customs or the Commissioner of Customs, if sufficient cause isshown.
● For pending cases, the time limit shall be calculated from29th March 2025, i.e., the date of enactment of the Finance Act, 2025.
● Provided for certain grounds on which the time limit of twoyears shall apply not from the date of the order of the provisional assessment,but from the date when the reasons for such ground cease to exist.
● New Customs (Finalisation of Provisional Assessment)Regulations, 2025 have superseded the earlier Customs (Finalisation of Provisional Assessment) Regulations, 2018.
● Where duty leviable on imported or export goods is assessed provisionally due to non-availability of information and documents, then the proper officer shall inform the importer or the exporter about the information or documents to be furnished within 15 days from the date of such assessment ;
● Such documents shall be made available to the proper officer within 2 months from the date of such requisition by the proper officer;
● If documents or information are not furnished within a specified period of time. A proper officer may allow a further period but not exceeding 2 months, on his own or at the request of the importer or the exporter.
● Further, an officer to whom the proper officer is subordinate may allow an additional time period as deemed fit, for reasons to be recorded in writing, on request of the importer or the exporter regarding their inability to provide those documents or information as requested by the proper officer. However, such period shall not extend beyond 14 months from the date of provisional assessment.
If documents or information required to be furnished by the importer or the exporter are not made available within the time allowed, then the proper officer shall proceed to finalise the provisional assessment based on documents or information as available on the record
● If the duty is assessed provisionally by the proper officerfor the reason that it is deemed necessary to make further enquiry, then theofficer of customs shall complete the enquiry and transfer the documents alongwith the report to the proper officer for finalization of assessment within 14months from the date of provisional assessment;
● The proper officer may ask for any additional information ordocument in the manner specified above in Point No. 3;
● Where the assessment is pending for finalisation as on the29th March, 2025, then the time-limit for submission of documents or conclusionof enquiry shall be computed from 29th March, 2025
● As clarified through Circular No. 40/2011-Customs dt.09.11.2011, the importer or exporter may make payment of the duty amountascertained on their own anytime during the pendency of provisional assessment,along with applicable interest.
● This amount shall be adjusted against the duty finallyassessed or reassessed, as the case may be.
● The proper officer shall finalise the duty provisionallyassessed within 3 months of:
○ receipt of documents orinformation from the importer or the exporter, or on the expiry of the time forsubmission of documents; or
○ conclusion of enquiry inaccordance with regulation 5 of these regulations
● Any officer to whom the proper officer is subordinate may allowan additional period of 2 months if the proper officer is not able to finalisethe provisional assessment within the period of three months;
● The assessment shall be finalised within 2 years from thedate of the provisional assessment under section 18(1) of the Customs Act,1962;
● Provisional assessment pending on 29th March, 2025, the saidperiod of two years shall be reckoned from 29th March, 2025.
● Where the proper officer is unable to assess the duty finallywithin the specified time period for the reason that:
○ information is being soughtfrom an authority outside India through a legal process; or
○ an appeal in a similar matterof the same person or any other person is pending before the Appellate Tribunalor the High Court, or the Supreme Court; or
○ an interim order of stay hasbeen issued by the Appellate Tribunal or the High Court, or the Supreme Court;or
○ the Board has, in a similarmatter, issued a specific direction or order to keep such matter pending; or
○ the importer or exporter hasa pending application before the Settlement Commission or the Interim Board,
Then the proper officer shall informthe importer or exporter concerned about the reason for non-finalisation of theprovisional assessment.
Further, a period of two years shallapply not from the date of provisional assessment but from the date when suchreason ceases to exist.
● Where the final assessment is contrary to the provisionalassessment, the proper officer shall pass a speaking order following the principlesof natural justice.
● Where the final assessment confirms the provisionalassessment, the proper officer shall finalise the same after ascertaining theacceptance of such finalisation from the importer or the exporter on record andinform the importer or exporter in writing of the date of such finalisation.
● Where the importer or exporter is to pay the deficiency ofthe amount after adjustment of the amount already paid, the bill of entry orthe shipping bill may be returned for payment of the amount.
● The importer or exporter is also liable to pay interest onthe above-mentioned differential amount.
● On finalisation of the provisional assessment, where:
○ The final assessment has confirmed the provisional assessment; or
○ the duty, along with the interest, has been paid in full; or
○ the importer has executed an appropriate bond binding himself in relation to the excess duty, in case of ware housed goods,
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.
● Where the duty, interest, fine, penalty or any other sum due has not been paid for more than 90 days from date of finalisation of the assessment and the sum due has attained finality for recovery, then the unpaid amount shall be adjusted from the security, if any, obtained at the time of provisional assessment, or shall be recovered as per Section 142 of the Act under intimation to the importer or the exporter.
● Where the importer or exporter is entitled to a refund, the refund shall be processed in terms of section 18(4) or (5) of the Act;
The Commissioner of Customs may, on sufficient causebeing shown and reasons to be recorded in writing, extend the period of twoyears for finalisation of provisional assessment by an additional time of 1year.
The CBIC has clarified vide Circular No. 22/2025-Customs dated 12th September, 2025:
● The Import or export can furnish a Single UnifiedMulti-Purpose Electronic Bond for provisional assessments as provided inCircular No. 04/2025-Customs dated 17.02.2025.
● The assessment pending for finalization for a period beyond17 Months, from the date of provisional assessment, should be reported to the Commissioner of Customs for effective monitoring and to adhere to the timelines. The Commissioner will personally monitor the cases beyond 17 months for finalization, or an appropriate decision shall be taken regarding extension.
The Provisional assessment is an important facilitative mechanism that allows an importer or exporter to clear the goods in time, where final assessment cannot be completed due to a lack of full information or documents. The updated legal framework is expected to bring transparency, predictability, and efficiency to the finalization process of provisional assessments.
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