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A Detailed Analysis of the Customs Authority for Advance Rulings Regulations 2021

Advance Rulings Regulations 2021
| Updated: Jan 21, 2021 | Category: News

Recently, the Government of India, by way of the powers provided under the provision of section 157, 28H, 28KA, 28M of the Customs Act 1962 has notified the rules named Customs Authority for Advance Rulings Regulations 2021, on 06.01.2021, through Notification No. 01/ 2021 – Customs (N.T.). Further, these rules will come into effect from the date of publication in the official gazette.

Also, it shall be considerate to take into the record that by way of the powers conferred under section 156 of the Customs Act 1962, the Central Government has permanently rescinded the Customs (Advance Rulings) 2002.

In this blog, we will discuss in detail about the newly implemented Customs Authority for Advance Rulings Regulations 2021.

Need for Implementing Customs Authority for Advance Rulings Regulations 2021

The main reason behind the implementation of the Customs Authority for Advance Rulings Regulations 2021 was to establish an authority which has the power to hear and determine the applications and petitions. Also, the same shall have all the powers and rights that of a civil court, such as follows:

Advance Rulings Regulations 2021
  1. Power to Order Inspection;
  2. Discovery of Documents;
  3. Filing of Affidavits;
  4. Issuing Commissions;
  5. Enforcing Attendance;
  6. Compelling Production of the Books of Account; etc.

Moreover, if in case the authority faces any difficulty in passing an order, then, in that case, it needs to first remove the said difficulty within a period of 1 month and then pass the appropriate order.

Further, it shall be pertinent to record that at present, only two CAAR (Customs Authority for Advance Rulings) have been notified by the government, which are CAAR Mumbai and CAAR Delhi.

Concept of Secretary under CAAR Regulations 2021

The term “Secretary” is defined under the provisions of section 2 (e) of the CAAR Regulations 2021 means a person who is not designated at any rank below the Assistant Commissioner of Central Tax or Assistant Commissioner of Customs.

Further, the person appointed as secretary will be overall in charge of the office of the Authority and will function under the direct supervision of the Authority.

Language of Authority

The authority established under CAAR Regulations 2021 shall operate in Hindi and English. Also, in case any document or record is in any language other than the prescribed ones, then, in that case, the parties need to attest the translated English or Hindi copy of the same.

Procedure for Filing Application with Authority

The steps involved in the process for filing application with Authority established under the provisions of Customs Authority for Advance Rulings Regulations 2021 are as follows:

  1. Firstly, the applicant requires to file an application between 10 am to 1 pm and 2 pm to 5 pm on a working day at the regional office of the Authority;
  2. Every application and it required attachments, verifications, documents, and statements must be duly signed;
  3. The said application must be annexed with a declaration of competency from the person signing it;

However, if in case, the applicant is not an Indian Resident, then, in that case, he/she requires to provide his/her official email and postal address abroad, together with the email and postal address of the person or representative residing in India.

Filing of Appeal against the Order Passed by Authority

If in case an applicant wants to file an appeal against the order passed by the Authority established under the provisions of the Customs Authority for Advance Rulings Regulations 2021, then, in that case, he/she requires to contact the Principal Officer.

The reason behind the same is that as per section 9 of the Rules prescribed, only the Principal Officer has the authority to file an appeal against the order passed by authority. Further, the said power has been given under the virtue of section 28KA (1).

Manner of Filing Appeal under Customs Authority for Advance Rulings Regulations 2021

If in case an applicant or the Principal Officer want to file an appeal against the order passed by the authority, then, in that case, they need furnish Form CAAR 2 and Form CAAR 3, together with the fees prescribed.

Also, the date on which the said appeal is filed shall be considered as the date of receiving by the Appellate Authority.

Further, it shall be taken under the due consideration that an applicant without the leave of the court shall not raise any question other than the one specified in the application.

Provisions Concerning Filing of Additional Facts Under CAAR Regulations 2021

The parties involved or the Principal Officer can file additional facts and documents only if the same is allowed by the Authority established. Also, it shall be pertinent to note that the Authority on a Suo Motu basis can allow the filing of additional documents as well.

Provisions Concerning Continuation of Proceedings.

If in case the applicant dies or the company involved in the proceedings become insolvent, dissolved, or amalgamated, then, in that case, the proceedings will not come to an end, and the same will be carried by either of the following of the applicant:

Facts Under CAAR Regulations 2021
  1. Executor;
  2. Administrator;
  3. Liquidator;
  4. Receiver;
  5. Assignee;
  6. Legal Representative;

Hearing of Application under Customs Authority for Advance Rulings Regulations 2021

The application filed shall be heard on the day fixed or any other day to which the said case is adjourned. Further, it shall be compulsory for the authority to grant an opportunity of being heard to the party if in case the authority proposes to reject the application filed.

Also, the authority established has the power to call and hear the principal officer or its representatives if it considers the same necessary prior to pronouncing its Advance Ruling.

Withdrawal of Application under CAAR Regulations 2021

There are two ways by which an applicant can withdraw the application filed, which as follows:

  1. Either by withdrawing it within 2 weeks of filing;
  2. By leave of court;

Cases where Declaration of Proceedings is considered Void

The cases wherein the declaration of proceedings filed is considered void are as follows:

  1. Where the Advance Ruling pronounced has been obtained by Fraud, Misrepresentation of Facts;
  2. If the Authority after duly examining the representation filed is of the opinion that the Advance Ruling pronounced has been obtained by Fraud, Misrepresentation of Facts;
  3. If the Applicant himself/herself by way of writing informs the grounds on which the Advance Ruling pronounced is void ab initio;
  4. Wherein a copy of the notice, together with enclosures is forwarded to the Principal Officer;
  5. If the Authority finds that the Advance Ruling pronounced has been obtained by Fraud, Misrepresentation of Facts, then, in that case, same will be considered as void ab initio;

Other Provisions under Customs Authority for Advance Rulings Regulations 2021

The other miscellaneous provisions mentioned under the Customs Authority for Advance Rulings Regulations 2021 deals with the aspects, such as follows:

  1. Signing of Notices;
  2. Filing of Notices;
  3. Commissioner Designated by Board;
  4. Authorisation to be Filed;
  5. Withdrawal of Application;
  6. Rectification of Mistakes;
  7. Amendment of Records;
  8. Supply of Certified Copies;
  9. Inspection of Records;
  10. Procedure in case of Petition;
  11. Dress Regulations;
  12. Proceedings of Authority, etc.;

Conclusion

In a nutshell, the main reason behind the enforcement of the Customs Authority for Advance Rulings Regulations 2021 was to establish an authority which will have the same power that of any Civil Court in India. Further, the government by way of the powers given by section 156 of the Customs Act 1962[1] has permanently rescinded the Customs (Advance Rulings) 2002.

Also, it shall be relevant to state that the person appointed as secretary will be overall in charge of the office of the Authority and will function under the direct supervision of the Authority.

In case of any other doubt or query, visit Swarit Advisors, our proficient expert will contact you back to cater to all your needs.

Official Notification No. 01/ 2021 – Customs (N.T.)

Customs-Authority-for-Advance-Rulings-Regulations-2021

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Shivani has completed her B com LLB (Hons) and has the experience of writing various research papers during her college time. Earlier she was working as an Associate in a Delhi based Law Firm, but her interest in writing made her pursue Legal Content Writing as a career. Her core area of interest is in writing about various legal enactments, tax, and finance.

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