Budget may relax compliance with Customs rules

The Centre might propose a raft of changes in the Customs rules to weed out duty anomalies, retain certain exemptions, and improve compliance in the upcoming Union Budget.

- SHIRMI CHOUDHARY & RUCHIKA CHITRAVANSHI

According to two officials privy to the discussion, some crucial measures concerning Customs have been deliberated on to boost domestic manufacturing, ensure hassle-free and appropriate compliance, and curb tax leakages.

Official sources indicate that the Centre is planning to introduce electronic bank guarantees (BGS) for importers to plug revenue leakage. Retaining duty exemptions on some items and tweaking Customs duty rates, particularly on medical equipment and consumer electronics to boost the domestic economy, are also on the cards, they said.

Other measures are also being deliberated on for the duty refund process and reducing the time frame for updating exchange rates of tariffs.

Customs authorities seek BGs in case of a differential amount of applicable duty which should be deposited before provisionally clearing the consignment. As a practice, physical BGs are largely used, which makes it challenging for authorities to track, resulting in huge revenue loss, said one of the two officials.