In the budget, the finance ministry suggested setting a two-year deadline—which might be extended by one year—for completing preliminary evaluations of import and export shipments in an effort to lower uncertainty and expenses for exporters. There is currently no set deadline for completing preliminary assessments under the Customs Act of 1962, which leads to delays and uncertainty. The Global Trade Research Initiative (GTRI), an economic think tank, stated that the new clause, which requires finalization within two years and can be extended by another year, will give firms more consistency.
According to the budget documents, the change would include adding a new section to the Customs Act “to provide a time limit of two years for finalization of provisional assessment.” If adequate justification is provided, the Commissioner of Customs may extend the deadline for an additional year.
It further provides that, for the pending cases, the time limit shall be computed from the date of assent of the Finance Bill, 2025. In order to encourage voluntary compliance, the ministry has also suggested that importers and exporters submit relevant information after clearance and pay duty with interest but without penalties. The goal of the action is to decrease disagreements and increase compliance.
GTRI claims that importers and exporters are exempt from fines under this new voluntary compliance program if they disclose material facts and pay any additional charges with interest following the clearance of their goods. The finance ministry has increased the time restriction for using imported inputs from the current six months to one year in an effort to further boost export competitiveness. Furthermore, importers would no longer have to submit monthly statements; instead, they would only need to submit quarterly ones, which would simplify compliance requirements.
The period for exporting handicrafts made using duty-free materials by legitimate exporters is being extended from six months to a year, with the option to extend it by an additional three months, in an effort to enhance handicraft exports.
