Q.1 When does a situation arise where duty paid is refunded to the Export/Importer?
A. There may be occasion where importers and exporters pay duty in excess of the amount payable either due to wrong classification of goods or due to incorrect value, incorrect rate of duty applied, etc. The importers and exporters are entitled to get refund of such excess duty paid in terms of section 27 or 26 of the customs Act, 1962, as the case may be.
If the refund is not paid to the importers/exporters within the stipulated time interest is payable on the amount of refund at the rate of 15 percent per annum as per the section 27A of the Customs Act 1962 read with notification no. 32/95 –NT (Cus) dated 26.5.95
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Q.2 What is the procedure to claim refund of excess duty and interest paid on imported goods?
A To get refund of excess duty or interest paid, the importers should file a refund application in the prescribed format in duplicate before the Assistant Commissioner of Customs having jurisdiction over the customs port, airport, land customs or customs warehouse where the duty of customs/inertest was paid. Such refund claim should be filed within one year from at the date of payment of duty, if the import is made by, any individual for his personal use or by Government or by any educational, research or charitable institution or hospital.
In case of other category of importers, the time limit is six months only.
However, in the case of goods, which are exempt from payment of duty by a special order issued under sub-section (2) of section 25 of the Customs act, 1962 (Ad hoc exemption order), the limitation of one year or six months, as the case may be, shall be computed from the date of issue of such order.
The limitation of time limit of one year or six months shall not apply where any duty was paid ‘under protest’. In the case the imports made (other than an individual for his personal use) excess duty and interest paid is refunded only when such excess duty and interest paid by the importer is not passed on to any other person.
It must be clearly indicated in the refund application the growth on which the refund is claimed with the supporting documents.
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A. Yes. As per section 27 A of the Customs Act 1962 if the amount due is not refunded within three months from the date of receipt of the application by the department, interest is payable on such refund amount from the date of expiry of three months of the receipt of the application till the date of refund at the rate of 15 per cent per annum as per notification no. 32/95-Nt (Cus) dated 26.5.95.
Any order passed by the Commissioner (Appeals), Appellate Tribunal or any court against an order of the Assistant Commissioner of Customs shall be deemed to be an order passed under sub-section (2) of section 27 of the Customs Act, 1962 and the interest is accordingly payable.
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Q.4 If any excess duty is paid on export goods, can it be refunded? If so, what is the procedure?
A Yes. If any excess duty is paid on export goods, an application for refund of such duty should be made before the expiry of six months from the date on which the proper officer makes an order for clearance of goods for export. (Section 26 of the Customs act 1962).
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