MM TAX CLUB

18th August, 2022

G.S.R. 636(E).—In exercise of the powers conferred by clause (ha) of sub-section (2) and subsection (4) of section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. Short title and commencement.— (1) These rules may be called the Income-tax (27thAmendment) Rules, 2022.

(2) They shall be deemed to have come into force from 1at day of April, 2022.

2. In the Income-tax Rules, 1962, in rule 128, for sub-rule (9) the following sub-rule shall be substituted, namely:-

“(9) The statement in Form No. 67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the end of the assessment year relevant to the previous year in which the income referred to in sub-rule (1) has been offered to tax or assessed to tax in India and the return for such assessment year has been furnished within the time specified under sub-section (1) or sb-section (4) of section 13:

Provided that where the return has been furnished under sub-section (8A) of section 139, the statement in Form No. 67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) to the extent it relates to the income included in the updated return, shall be furnished on or before the date on which such return is furnished.”

[Notification No. 100/2022/F. No. 370142/35/2022-TPL]

Explanatory Memorandum: This amendment is effective from the 1st day of April, 2022 so that it applies to all the claims of foreign tax credit furnished during the financial year 2022-2023. It is hereby certified that no person is being adversely affected by giving retrospective effect to this rule.

Note : The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Subsection (ii) vide number S.O. 969 (E) dated the 26th March, 1962 and last amended vide notification number G.S.R 634 (E) dated 17 th August, 2022.

The Institute of Chartered Accountant of India (ICAI) releases Guidance Note on Tax Audit under Section 44AB of the Income-tax Act, 1961- AY 2022-23.

Guidance note is Effective for the AY 2022-23 and subject to amendments made by law, judiciary or administration, for the subsequent assessment years.

Subsequent to the insertion of Section 28DA in Customs Act, 1962 on 27.3.2020, the CBIC Notification No. 81/2020-Customs (NT) dated 21.08.2020. notified theCustoms (Administration of Rules of Origin under Trade Agreements) Rules, 2020.

2. Further, as you are also aware, the operational certification procedures related to implementation of Rules of Origin (pertaining to each trade agreement - FTA/ PTA/ CECA/ CECA/ CECPA), stand separately notified under Section 5 of Customs Tariff Act, 1975.

3.1 For uniform and judicious application of provisions, the Board has previously issued Circular No.38/2020-Customs dated 21.08.2020, Instruction No.20/2020-Customs dated 17.12.2020 & No.18/2021-Customs dated 17.08.2021, and letter F.No.15021/18/2020(ICD) dated 13.11.2020.

3.2 In continuation of the same, field formations are sensitized by drawing attention again to section 28DA. It is emphasized that its sub-section (3) empowers the proper officer to ask the importer to furnish further information, consistent with the trade agreement, in case the proper officer has reasons to believe that the country-of-origin criteria have not been met. Similarly, its sub-section (4) enables the proper officer, where the importer fails to provide the requisite information for any reason, to cause further verification consistent with the trade agreement. Moreover, in the Rules, the rule 8 (3) states - “In the event of a conflict between a provision of these rules and a provision of the Rules of Origin, the provision of the Rules of Origin shall prevail to the extent of the conflict.”

4. Hence, the Officers under your charge should be sensitive to applying CAROTAR maintaining consistency with the provisions of relevant trade agreement or its Rules of Origin.

5. Hindi version follows.

Attention is invited to the guidelines for arrest and bail in relation to offences punishable under Customs Act, 1962 issued vide F. No. 394/71/97-Cus (AS) dated 22.06.1999 and F. No. 394/68/2013-Cus (AS) dated 17.09.2013 and Circular No. 28/2015-Customs dated 23.10.2015. The threshold limit (s) specified in the guidelines therein has been further streamlined in accordance revision of threshold limits for launching of prosecution in relation to offences punishable under Customs Act, 1962 vide Circular No.12/2022-Customs [CBIC-21/209/2022-INV-CustomsCBEC)] dated 16.08.2022

2. Accordingly, the para 2.3 of the existing guideline issued vide F. No. 394/68/2013-Cus (AS) dated 17.09.2013 as amended by Circular No. 28/2015 dated 23.10.2015 shall read as under:-

“ 2.3 While the Act does not specify any value limits for exercising the powers of arrest, it is clarified that arrest in respect of an offence, should be effected only in exceptional situations which may include:

1. Cases involving unauthorised importation in baggage/ cases under Transfer of Residence Rules, where the market value of the goods involved is Rs. 50,00,000/- (Rupees Fifty Lakh) or more;
2. Cases of outright smuggling of high value goods such as precious metal, restricted items or prohibited items or goods notified under section 123 of the Customs Act, 1962 or offence involving foreign currency where the value of offending goods is Rs. 50,00,000/- (Rupees Fifty Lakh) or more;
3. Cases related to importation of trade goods (i.e. appraising cases) involving wilful mis-declaration in description of goods/concealment of goods/goods covered under section 123 of Customs Act, 1962 with a view to import restricted or prohibited items and where the market value of the offending goods is Rs. 2,00,00,000/- (Rupees Two Crore) or more;
4. Cases involving fraudulent evasion or attempt at evasion of duty involving Rs 2,00,00,000/- (Rupees Two Crore) or more;
5. cases involving fraudulent availment of drawback or attempt to avail of drawback or any exemption from duty provided under the Customs Act, 1962, in connection with export of goods, if the amount of drawback or exemption from duty is Rs. 2,00,00,000/- (Rupees Two Crore) or more. In cases related to exportation of trade goods (i.e. appraising cases) involving (i) wilful mis-declaration in value / description ; (ii) concealment of restricted goods or goods notified under section 11 of the Customs Act, 1962, where market value of the offending goods is Rs. 2,00,00,000/- (Rupees Two Crore) or more.
6. Cases involving obtaining an instrument from any authority by fraud, collusion, wilful misstatement or suppression of facts and utilisation of such instrument where the duty relatable to such utilisation of the instrument is Rs 2,00,00,000/- (Rupees Two Crore) or more.

3. The Principal Chief Commissioners/Chief Commissioners/Pr. Director Generals/Director Generals are hereby directed to circulate the present guidelines to all the formations under their charge.

4. Difficulties, if any, in implementation of the aforesaid guidelines may be brought to the notice of the Board.

Circular No. 12/2022-Customs dated 16.08.2022

I am directed toCu refer to the Prosecution Guidelines issued vide Board’s Circular No. 27/2015-Customs dated 23.10.2015 on the above mentioned subject and the subsequent amendments vide Circular No. 46/2016 dated 04.10.2016, Circular No. 07/2017 dated 06.03.2017 and Circular No. 12/2019 dated 24.05.2019.

2. The present nominal monetary thresholds with respect to launching prosecutions and related matters were provided in Circular No. 27/2015-Customs dated 23.10.2015 and taking relevant aspects into account, with the approval of the competent authority, it has been decided to revise the threshold limits for various categories of cases for launching prosecution given under Para 4.2.1.1 and Para 4.2.1.2 (including all sub paras) of the aforesaid Circular

3. The revised threshold limits are given as under:

3.1. Baggage and Outright smuggling cases:

1. Cases involving unauthorized importation in baggage/cases under Transfer of Residence Rules, where the market value of the goods involved is Rs. 50,00,000/-(Rupees Fifty Lakh) or more;
2.  Outright smuggling of high value goods such as precious metal, restricted items or prohibited items notified under section 11 of the Customs Act, 1962 or goods notified under section 123 of the Customs Act, 1962 or foreign currency where the market value of offending goods is Rs. 50,00,000/- (Rupees Fifty Lakh) or more;

3.2. Appraising Cases/ Commercial Frauds:

i) In cases related to importation of trade goods (i.e. appraising cases) involving-

              (a) wilful mis-declaration in value/description;

               (b) concealment of restricted goods or goods notified under section 11 of the Customs Act, 1962,

(ii) In cases related to fraudulent availment of drawback or attempt to avail of drawback or any exemption from duty provided under the Customs Act 1962, in connection with export of goods, if the amount of drawback or exemption from duty is Rs. 2,00,00,000/- (Rupees Two Crore) or more; 2,00,00,000/- (Rupees Two Crores) or more;

3. In cases related to fraudulent evasion or attempt at evasion of duty under the Customs Act 1962, if the amount of duty evasion is Rs. 2,00,00,000/- (Rupees Two Crore) or more;
4.  In cases related to exportation of trade goods (i.e. appraising cases) involving,-

1. wilful mis-declaration in value/description;
2. concealment of restricted goods or goods notified under section 11 of the Customs Act, 1962,

where market value of the offending goods is Rs. 2,00,00,000/- (Rupees Two Crore) or more.

5. Obtaining an instrument from any authority by fraud, collusion, wilful misstatement or suppression of facts and utilisation of such instrument where the duty relatable to utilisation of the instrument is Rs. 2,00,00,000/- (Rupees Two Crore) or more.

4. Further, in respect of cases involving non-declaration of foreign currency by foreign nationals and NRIs (normally visiting India for travel/business trips etc.) detected at the time of departure from India, exceeding the threshold limits of Rs 50 lakh as prescribed above, if it is claimed that the currency has been legally acquired and brought into India but not declared inadvertently, prosecution need not be considered as a routine.

5. Board’s Circular No. 27/2015-Customs dated 23.10.2015 stands modified to the extent above. Insofar as threshold limits are concerned, all cases where sanction for prosecution is accorded after the issuance of this Circular, shall be dealt in accordance with provisions of this Circular irrespective of the date of offense; cases where prosecution has been sanctioned but no complaint has been filed before the magistrate shall also be reviewed by the prosecution sanctioning authority in light of the provisions of this Circular.

6. The Principal Chief Commissioners/Chief Commissioners, Principal Director Generals/Director Generals and the Principal Commissioners/Commissioners are hereby, requested to circulate these guidelines to all the formations under their charge

7. Difficulties, if any, in implementation of the aforesaid Guidelines may be brought to notice of the Board.