REFUNDS

REFUNDS UNDER SECTION 26
REFUND CLAIMS UNDER SECTION 27
TIME LIMIT FOR FILING CLAIMS
MANNER OF CLAIMING REFUND
MANNER OF CLAIMING REFUND
PAYMENT OF REFUND CLAIMS
PAYMENT OF INTEREST ON DELAYED REFUNDS
  LEGISLATIVE REFERENCES

OBJECT:

Section 26 of the Customs Act, 1962 is a statutory provision to claim refund of export duty paid by the exporter.

ESSENTIAL INGREDIENTS:

  1. The goods must have been returned to the exporter other than by way of re-sale.
  2. The goods must have been re-imported within one year from the date of exportation.

TIME LIMIT:

An application for refund claim must be made within six months from the date of order of clearance of goods.

REFUND CLAIMS UNDER SECTION 27

OBJECT:

Section 27 is a statutory authority for allowing refund of both Customs duty and interest.

Any person who has either paid duty or interest, or borne the burden thereof may make a claim for refund under this provision. Assistant /Deputy Commissioner of Customs is the proper officer under the Customs Act to grant refunds.

TIME LIMIT FOR FILING CLAIMS:

Law prescribed limitation for claims of refund are as follows:

  1. If imports have been made by individual for his personal use, or are made by the government, or educational, research, or charitable institution, or hospital, claim must be filed before expiry of one year from the date of payment of duty.
  2. In all the other cases, not covered above, the claim must be filed within six months from the date of payment of duty.
  3. If the duty has been paid under provisional assessment, the period of one year or six months will be reckoned from the date of final assessment.
  4. If the duty has been paid "under protest", above limitation will not apply.
  5. If the refund arises as a result of special or ad hoc exemption granted under Section 25(2), the period of six months or one year will be computed from the date of such exemption order under Section 25(2).

    MANNER OF CLAIMING REFUND:

    1. An application for refund of duty/interest will be made in terms of Customs Refund Application (Forms) Regulation Act, 1995.
    2. The claim should be made before the Asst/Deputy Commissioner of Customs within whose jurisdiction the duty or interest was paid.
    3. Acknowledgment for claim should be obtained from the proper officer after examining the application for completeness, within ten working days from the date of application. The date on which the proper officer gives acknowledgement will be the basis on which interest payable under section 27 will be calculated.
    4. The applicant should enclose the following documents wherever applicable:
      1. Triplicate copy of bill of entry/post parcel wrapper/shipping bill/baggage Receipt or Purchase Invoice
      2. Duty Challan /other document as evidence of duty payment.
      3. Signed working sheet for the amount of refund claimed
      4. Customs attested invoice
      5. Customs attested packing list
      6. Documents for establishing the applicant’s eligibility to receive the refund amount in terms of the proviso to sub-section (2) of Section 27 of the Act, including documents for the purposes of Section 28 C and 28 D of the Act.
      7. Contract and Purchase order
      8. Modvat Credit certificate from Central excise authorities
      9. Order in original/in revision/in Appeal/any other order
      10. Short delivery certificates from custodian
      11. Short shipment certificate from the supplier
      12. Survey Report
      13. Insurance claim settlement certificate
      14. Catalogue/ Technical write-up /literature
      15. Certificate of original
      16. Letter of authorization from the importer/buyer in case the applicant is an agent.
      17. Any other document considered necessary in support of the claim (to be specified)

Payment of refund claims

Refund claims are normally paid to the claimants under the following circumstances.

  1. If the claimant has not passed on the incidence of duty or interest to any other person.
  2. If the importer is an individual who uses the goods personally.
  3. If the claimant is a buyer of imported goods, he must not have passed on the incidence of duty and interest to another person.
  4. Export duty refundable under Section 26.
  5. Persons notified by the Central Government for the purpose of this provision. However, all such notifications issued by the Central Government have to be tabled before the Parliament.

Payment of interest on delayed refunds

Section 27A provides that if refund is not granted within three moths from the date of receipt of application claiming refund, then an interest at the rates between 10% to 30% as prescribed by the Board shall be paid. The Board has issued Notification No.32/95-Cus.(N.T.), dated 26.05.1995 and fixed this interest at 15% per annum.

Legislative references:

Section 26 of the Customs Act,1962

Section 27 of the Customs Act,1962

Section 27 A of the Customs Act,1962

Customs Refund Application (Forms) Act, 1995

Section 26 of the Customs Act,1962

Section 27 of the Customs Act,1962

Section 27 A of the Customs Act,1962

Customs Refund Application (Forms) Act, 1995