Circular No. 01/2019-Customs
F. No: 450/119/2017-Cus-IV
Government of India
Ministry of Finance
Dept. of Revenue
(Central Board of Indirect Taxes and Customs)
*****
Room No. 227B, North Block, New Delhi
Dated, 2
nd
January, 2019
To,
All Principal Chief Commissioners/Chief Commissioners of Customs/Customs
(Preventive)
All Principal Chief Commissioners/Chief Commissioners of Customs & Central Excise
All Principal Commissioners/Commissioners of Customs/Customs (Preventive)
All Principal Commissioners/Commissioners of Customs & Central Excise
Subject: IGST Export Refunds–resolution of errors– reg.
Madam/Sir,
The processing of IGST refund claims on exports is fully automated. Majority of
refunds claims are getting processed and sanctioned within five days of filing of GSTR-1 and
GSTR-3B returns. However, in a few cases, particularly for the LCL cargo consignments
originating from ICDs, Export General Manifest (EGM) related errors continue to hinder
smooth and automatic sanction of IGST refund claims. The nature of these errors has been
examined in detail. It has been observed that the main reasons for such EGM errors still
hampering the IGST refund processing are as under:
(i) Online filing of both local and Gateway EGM not being done on time by the
concerned stakeholders.
(ii) Mismatch in local and gateway EGM details wherever both are filed online.
(iii) Non-filing of stuffing report by the Preventive officers at Gateway Ports for the
LCL cargo being consolidated at the Gateway Ports/CFSs in the system.
2. Non-filing/Late filing of Online Local and Gateway EGM: -
(i) The processing of IGST refund gets hampered either because the local EGM has not
been filed online or has been filed late. There are instances where the cargo originating
from the hinterland ICDs reached the gateway port without the local EGM having been
filed online. Earlier vide Circular No. 42/2017-Cus., dated 7.11.2017 it was explained
that due to manual filing of EGM in respect of Shipping bills originating from ICDs,
system is unable to match the gateway EGM and the local EGM. Therefore, it was
instructed that all the custodians / carriers / shipping lines operating at ICDs/ Gateway
ports should file EGM online. It is re-iterated that the first step would be that the
concerned stakeholders at the originating ICDs file the local EGMs online.
(ii) Where the export goods are directly moved by truck to the gateway port, in such
cases, filing the local EGM timely should not pose any problem. At inland ICDs/CFSs
connected by train, the local EGM shall be filed before the goods actually move out of
ICD/CFS. In ICDs/CFSs not connected by train but where the movement of export
goods begins from the nearest train-based ICD/CFS, it has been observed that local
EGM is not being filed as the Train Number is not known to the custodian for the want
of Rail receipt. In such cases, it must be ensured that local EGM is filed by the custodian
immediately after getting Train details in which containers are moving to Gateway port
but in any case, before the train leaves for the Gateway port. Officers at these stations
shall constantly monitor to check the pendency and take necessary action.
(iii) Non-filing of EGM clearly hints at non-compliance by the custodian / person in
charge of the conveyance carrying export goods. Section 41 of the Customs Act
authorizes the customs officer to take action against such non-filers. However, more
than invoking the penal sections, jurisdictional Commissioners need to constantly
monitor the activity of timely filing of the EGM and take necessary steps to ensure the
same.
(iv) Board expects its jurisdictional officers to take all necessary steps to ensure that all
EGMs of cargo related to past cases are filed before 31
st
January 2019. As a measure
of facilitation, penal provisions may not be invoked for EGMs filed till 31
st
January,
2019. However, continued non-compliance beyond 1
st
February, 2019 may be dealt
strictly by taking recourse to penal provisions in accordance with the law.
3. Mismatch in Local EGM and Gateway EGM:
(i) The errors arising out of mismatch of information provided in local and Gateway
EGM has been discussed in para 6 of Circular No. 06/2018-Customs where in Board
had clearly delineated the roles and responsibilities of the Customs officers at the inland
ICDs/ CFSs and at the Gateway port or CFSs attached with the gateway ports
respectively in so far as the task of integrating the local EGM and the gateway EGM
was concerned.
(ii) One of the major hindrances in smooth processing of IGST refunds for the past
period is the problem faced by field formations in gathering information with regard to
LCL cargo from Shipping lines and Custodians. The matter has been examined. The
procedure related to consolidation of cargo at Gateway ports has already been
prescribed vide Circular No. 55/2000-Cus dated 30.06.2000 wherein it is provided
inter-alia that the custodian of the gateway port or CFS near gateway port is required
to maintain a tally sheet container-wise, giving details of the export consignments, the
previous Container No., Shipping Bill No., AR-4 No. and the details of new container
in which goods have been re-stuffed. It was also mandated that the concerned shipping
line would issue the Bill of Lading, a copy of which would be handed over to the
custodian. After necessary endorsements regarding inspection, the other transference
copy would be returned to the originating ICD/CFS. Thus, the custodian of the CFSs
or Gateway port bears the responsibility to maintain all records with regard to LCL
cargo consolidated at their premises. Subsequently, vide circular No. 08/2018-
Customs, instead of the said transference copy, correlation with final bill of lading or
written confirmation from the custodian of the gateway CFS was permitted for
purposes of integration of the local and gateway EGM.
(iii) It has also been learnt that in some field formations tally sheet is being maintained
in the form of Container Load Plan (CLP) which is prepared by Shipping lines and
gives details of packages stuffed in the container. It has been reported that cargo is de-
stuffed under customs supervision based on Container De-stuffing Plan (CDP).
Preparing CLP/CDP does not absolve the custodian of the responsibility of keeping
account of the cargo being handled in the form of a tally sheet. Such local practice of
CLP/CDP appears to have been started only for the convenience of shipping
lines/custodian. The accounting of previous containers vis-a-vis new container in case
of LCL cargo being re-stuffed at CFS or Gateway port is an important event in
establishing the linkage between the local EGM and Gateway EGM. Circular 55/2000-
Cus dated 30.06.2000 mandating the procedure to be followed at Gateway Ports or CFS
attached to Gateway ports and the originating inland ICDs/CFSs for consolidation of
LCL cargo on Gateway ports or CFS attached to such gateway ports is still in vogue
and the same has not been dispensed with.
(iv) Agents of Shipping lines / freight forwarders/ consolidators operating at the inland
ICDs/CFSs play a very critical role in booking of the export cargo for the overseas
destination. CBIC has deputed its officers to some of the inland ICDs/ CFSs. The
feedback obtained has revealed that these entities have all the necessary information
regarding the movement of goods from ICDs/ CFSs to Gateway port, consolidation at
the gateway port and journey beyond. These entities can be easily approached to
provide the requisite information/ documents for rectification of EGM related errors in
case exporters for some reason do not have the requisite information. Jurisdictional
Customs officers at inland ICDs/ CFSs are therefore, required to approach these agents
to obtain the details of re-worked containers (C or N related EGM errors). The
information gathered from the agents shall be collated and immediately communicated
to Gateway port officers so that rectification of errors (C or N) could be done.
(v) Customs officers in charge of CFSs shall provide list of Shipping Bills having
SB006 error i.e EGM errors to the concerned CFSs at gateway ports. The custodians
shall in turn provide details as mentioned in Tally Sheets or CDP/CLP (containing
container details) relating to the said SBs to the Customs officers. Simultaneously,
Gateway port officers shall coordinate with the officers of the originating ICDs/ CFSs
to obtain relevant particulars in accordance with the procedure in para (iv) above. It
shall be the responsibility of the officers in charge of CFSs at Gateway ports to obtain
necessary details from the stakeholders which establish the linkages between the goods
received from inland ICDs/ CFSs and those exported out of India except in cases where
the local EGM has not been filed in which case the responsibility would be of the
officers manning the inland ICD/CFS.
(vi) Once the details are received, the Preventive officer/ P.O. at the gateway port CFSs
shall use the option in the Preventive Officer role (PREV_OFF) to rectify container
details. (Refer ICES Advisory 08/18 dt. 09.03.2018). The preventive officer can amend
the container details in the Gateway EGM CTR Amendment Option to correct the N
and C errors after verifying the relevant details from shipping bill, master BL and
House(local) BL. Once the corrections are made, EGM officer at Gateway port can
revalidate EGMs for successful integration of the updated details. For those shipping
bills in respect of which no gateway EGM was filed in the first place, the shipping line
can file supplementary EGM for successful integration.
(vii) Responsibilities and liabilities of custodians have been provided in detail in the
Handling of Cargo in Customs Areas Regulations, 2009. Regulation 6 clearly casts the
responsibility of keeping account of export goods on the Customs Cargo Service
Provider (CCSP). Further, the procedure for suspension or revocation and imposition
of penalty is provided in Regulation 12 which can be resorted to in cases where CCSP
fails to comply with the regulations. This must be strictly enforced after following due
process in instances of persistent non-compliance.
(viii) Export of goods out of India is an essential condition for grant of IGST refund as
provided in Rule 96 of CGST Rules, 2017. It therefore warrants verification whether
the goods were indeed exported out of India where the IGST refund claims have been
long pending with EGM error (SB006).
4. Stuffing Report by Preventive Officers at Gateway Ports
(i) It appears that in some gateway ports, the Preventive officers are entering stuffing
report in ICES application of Customs EDI System pertaining to the shipping bills
filed only in gateway port, but not for the shipping bills which have been filed in
ICDs. It is important that Preventive officers posted in gateway ports should enter
stuffing reports for all shipping bills irrespective of the fact from where they have
been filed i.e in gateway port or ICDs.
(ii) Further, in order to avoid the problem of mismatch in information in local and
gateway EGMs, the preventive officers must play a proactive role. Custodian at
CFSs/Gateway Ports shall prepare Tally Sheet as mandated in Circular No.
55/2000-Cus. The preventive officer shall supervise de-stuffing and re-stuffing, so
as to verify the details like number of package (s), quantity etc. and satisfy himself
that there is no short shipment, replacement or diversion of cargo etc. In addition
to providing the stuffing report for the local cargo, the gateway port officer should
also verify the correctness of package (s) and container details for cargo coming
from inland ICDs cargo immediately in ICES, using the Gateway EGM CTR
Amendment option. Tally sheet shall be prepared containing all the necessary
details simultaneously. Corrections, if required, in the container/package details
shall be rectified at this stage itself to avoid the occurrence of N and C errors, when
the gateway EGM is eventually filed. Once the corrections are made, the EGM
officer at the Gateway port can revalidate EGMs for successful integration of the
updated details.
5. Board had vide Circular No. 67/2000-Customs extended the procedure prescribed in
55/2000-Customs to agents of shipping lines / MTOs / NVOCCS / freight
forwarders/consolidators. This was purely a facilitation measure taking into account the
business practice of the shipping lines. Board has allowed these entities a role in the logistics
chain only to facilitate the trade. Since these entities have the necessary information, it should
not be difficult for them to provide the particulars required to resolve the pending SB006 cases.
Therefore, there is a responsibility on these entities to coordinate with the field formations in
return. Board would be constrained to review the facility given vide 67/2000-Customs to
agents of shipping lines / MTOs / NVOCCS / freight forwarders/ consolidators should there
be any report of non-cooperation and non-compliance from their side.
6. Chief Commissioners are requested to strictly implement the guidelines given above.
Difficulties, if any, should be brought to the notice of the Board. Hindi version follows.
Yours faithfully,
(Zubair Riaz)
Director (Customs)
