Provisional assessment of duty

SECTION 18. 

¹[(1) Notwithstanding anything contained in this Act but without prejudice to the provisions of section 46 ²[and section 50],-

(a)      where the importer or exporter is unable to make self-assessment under sub-section (1) of section 17 and makes a request in writing to the proper officer for assessment; or 

(b)      where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test; or 

(c)       where the importer or exporter has produced all the necessary documents and furnished full information but the proper officer deems it necessary to make further enquiry; or
 
(d)      where necessary documents have not been produced or information has not been furnished and the proper officer deems it necessary to make further enquiry, 
 
¹⁴[“the proper officer may assess the duty leviable on such goods, provisionally,”;] if the importer or the exporter, as the case may be, furnishes such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty as may be finally assessed or re-assessed as the case may be, and the duty provisionally assessed.]

³[(1A) Where, pursuant to the provisional assessment under sub-section (1), if any document or information is required by the proper officer for final assessment, the importer or exporter, as the case may be, shall submit such document or information within such time, and the proper officer shall finalise the provisional assessment ¹⁵[“in such manner”] as may be prescribed.]

¹⁶[“(1B) The proper officer shall finalise the duty provisionally assessed, within two years from the date of such assessment under sub-section (1):

Provided that the Principal Commissioner of Customs or the Commissioner of Customs may, on sufficient cause being shown and for reasons to be recorded in writing, extend the said period to a further period of one year:

Provided further that in respect of any provisional assessment pending under sub-section (1) as on the date on which the Finance Bill, 2025 receives the assent of the President, the said period of two years shall be reckoned from the date on which the said Finance Bill receives the assent of the President.

(1C) Where the proper officer is unable to assess the duty finally within the time specified under sub-section (1B) for the reason that––

(a) an information is being sought from an authority outside India through a legal process; or

(b) an appeal in a similar matter of the same person or any other person is pending before the Appellate Tribunal or the High Court or the Supreme Court; or

(c) an interim order of stay has been issued by the Appellate Tribunal or the High Court or the Supreme Court; or

(d) the Board has, in a similar matter, issued specific direction or order to keep such matter pending; or

(e) the importer or exporter has a pending application before the Settlement Commission or the Interim Board, the proper officer shall inform the importer or exporter concerned, the reason for non-finalisation of the provisional assessment and in such case, the time specified in sub-section (1B) shall apply not from the date of the provisional assessment but from the date when such reason ceases to exist.”.]

(2)   When the duty leviable on such goods is assessed finally ⁴[or reassessed by the proper officer] in accordance with the provisions of this Act, then - 
(a) in the case of goods cleared for home consumption or exportation, the amount paid shall be adjusted against the duty ⁵[finally assessed or re-assessed, as the case may be,] and if the amount so paid falls short of, or is in excess of ⁶[the duty ⁷[finally assessed or re-assessed, as the case may be,]], the importer or the exporter of the goods shall pay the deficiency or be entitled to a refund, as the case may be;

(b) in the case of warehoused goods, the proper officer may, where the duty ⁸[finally assessed or re-assessed, as the case may be,] is in excess of the duty provisionally assessed, require the importer to execute a bond, binding himself in a sum equal to twice the amount of the excess duty.

⁹[(3)   The importer or exporter shall be liable to pay interest, on any amount payable to the Central Government, consequent to the final assessment order ¹⁰[or re-assessment order] under sub-section (2), at the rate fixed by the Central Government under section ¹¹[28AA] from the first day of the month in which the duty is provisionally assessed till the date of payment thereof.]
 
¹²[(4)   Subject the sub-section (5), if any refundable amount referred to in clause (a) of sub-section (2) is not refunded under that sub-section within three months from the date of assessment, of duty finally ¹³[or re-assessment of duty, as the case may be,] there shall be paid an interest on such un-refunded amount at such rate fixed by the Central Government under section 27A till the date of refund of such amount.]
 
¹²[(5)   The amount of duty refundable under sub-section (2) and the interest under sub-section (4), if any, shall, instead of being credited to the Fund, be paid to the importer or the exporter, as the case may be, if such amount is relatable to
 
(a) the duty and interest, if any, paid on such duty paid by the importer, or the exporter, as the case may be, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;

(b)  the duty and interest, if any, paid on such duty on imports made by an individual for his personal use;

(c)  the duty and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;

(d)  the export duty as specified in section 26;

(e)  drawback of duty payable under sections 74 and 75.]

Note :-

1. Substituted by Act 8 of 2011, section 39(a), for sub-section (1)(w.e.f. 08.04.2011). Sub- section (1) before substitution stood as under:

“(1) Notwithstanding anything contained in this Act, but without prejudice to the provisions contained in section 4—
(a) where the proper officer is satisfied that an importer or exporter is unable to produce any documents or furnish any information necessary for the assessment of duty on the imported goods or the export goods as the case maybe; or 

(b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test for the purpose of assessment of duty thereon; or 

(c) where the importer or exporter has produced all the necessary documents and furnished full information for the assessment of duty but the proper officer deems it necessary to make further enquiry for assessing the duty, 

the proper officer may direct that the duty leviable on such goods may, pending the production of such documents or furnishing of such information, or completion of such test or enquiry, be assessed provisionally if the importer or the exporter as the case maybe, furnishes such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty finally assessed and the duty provisionally assessed.”

2. Inserted by Finance Act, 2018 ( 13 of 2018), section 61 (w.e.f. 29.03.2018).

3. Inserted by Finance Act, 2018 ( 13 of 2018), section 61 (w.e.f. 29.03.2018).

4.  Inserted by Act 8 of 2011, section 39(b)(i) (w.e.f. 8-4-2011) 

5. Substituted by Act 8 of 2011, section 39(b)(ii) for “finally assessed”(w.e.f. 8-4-2011)

6. Substituted by Act 56 of 1974, section 3, and Second Schedule for “finally assessed”(w.e.f. 20-12-1974).

7. Substituted by Act 8 of 2011, section 39(b)(ii) for “finally assessed”(w.e.f. 8-4-2011).

8. Substituted by Act 8 of 2011, section 39(b)(ii) for “finally assessed”(w.e.f. 8-4-2011)

9. Inserted by Act 29 of 2006, section 21(w.e.f. 13-7-2006).

10. Inserted by Act 8 of 2011, section 39(c)(w.e.f. 08-4-2011).

11. Substituted by Finance Act, 2018 (13 of 2018), section 61 (w.e.f. 29.03.2018) for “28AB” and shall be deemed to have been substituted retrospectively with effect from the 8th day of April, 2011.

12. Inserted by Act 29 of 2006, section 21(w.e.f. 13-7-2006).

13. Inserted by Act 8 of 2011, section 39 (d)(w.e.f. 08-4-2011).

14.Subsitituted by the Finance Bill 2025 dated 01.02.2025 w.e.f 01.04.2026

in sub-section (1), for the words

the proper officer may direct that the duty leviable on such goods be assessed provisionally

The following shall be subsitituted:-

“the proper officer may assess the duty leviable on such goods, provisionally,”;

15. Subsitituted by the Finance Bill 2025 dated 01.02.2025

in sub-section (1A), for the words

within such time and in such manner,

The following shall be subsitituted:-

“in such manner”

16.Inserted by the Finance Bill 2025 dated 01.02.2025