Budget 2026 Live Updates: FM Sitharaman arrives at Kartavya Bhawan, set to present her ninth consecutive budget today
Impact: Expanding Customs AAR offices and allowing self-declared extensions would enhance trade certainty and reduce compliance burden and lower litigation on customs matters.
The Customs Authority for Advance Rulings (CAAR) is a legal provision under section 28E of the Customs Act, 1962, that enables clarity and certainty to the taxpayers by addressing doubts and concerns regarding the classification of goods, determination of customs valuation, and other related issues. Since the revamp of the CAAR post Finance Act of 2018, the CAAR has played a crucial role in promoting transparency, reducing uncertainty, and fostering compliance with customs regulations by offering clear guidance to importers, exporters, and other stakeholders involved in cross-border trade.
However, at present the offices of the CAAR are established only at locations, New Delhi and Mumbai, with all-India jurisdictional division between them. This is despite a considerable number of applications being made by trade involved in ports in south and east of the country, such as Chennai, Hyderabad, Kolkata, etc.
It is accordingly requested that the Government may consider establishment of at least two more offices of the Authority to cover South and East of India. This measure will go a long way in bringing certainty to the trade and reducing litigations on Customs matters.
Further, in terms of Section 28J(2) of the Customs Act, 1962, an advance Ruling is valid for three years unless there is a change in the underlying law or facts. However, clarification/ guidance is not provided for cases where there is no change of law or facts, and the applicant seek an extension of the validity of the ruling.
It is accordingly requested that a mechanism/process be considered for extension of the validity of the rulings, on self-declaration basis (as is done in case of AEO Tier 1 or SVB Circular 4/2016- Customs dated 9 February 2016) so that the hassle of re-applying for a ruling despite no change in facts or law can be avoided.
