Budget 2025: Govt Sets Two-Year Limit for Finalising Provisional Customs Assessments, Eases Compliance for Exporters

New Delhi, Feb 2 (PTI) – In a move to streamline trade procedures and reduce uncertainty for exporters, the Finance Ministry has proposed a two-year time limit for finalising provisional assessments of export and import consignments. This period can be extended by an additional year if justified, according to the Union Budget 2025.

Currently, the Customs Act, 1962 does not specify a fixed timeline for completing provisional assessments, often leading to delays and financial unpredictability for businesses. The new provision aims to address this issue by ensuring timely resolution of assessments, bringing greater predictability and efficiency to India’s trade ecosystem, stated the Global Trade Research Initiative (GTRI).

Key Provisions in the Budget 2025 Customs Amendment​

• A two-year deadline for finalising provisional assessments, extendable by one more year under exceptional circumstances.
• The time limit will be applicable to pending cases from the date of assent to the Finance Bill, 2025.
• Introduction of a voluntary compliance scheme allowing exporters and importers to declare material facts and pay duty with interest without penalties, provided customs authorities have not already initiated an audit or investigation.

Industry Welcomes the Move​

Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), hailed the reform, stating that it would significantly reduce uncertainty in financial planning. "By setting a clear time frame, businesses can anticipate the resolution of provisional assessments within a defined period, ensuring timely refunds or duty settlements, which in turn helps manage cash flows," Sahai said.

The proposal aligns India's customs procedures with global standards, potentially improving the country's ease of doing business and boosting its attractiveness for international trade, he added.

Additional Trade-Friendly Measures Announced​

To further ease compliance and enhance export competitiveness, the finance ministry has also introduced the following measures:

• Extended time limit for using imported inputs from six months to one year.
• Reduction in compliance burden for importers, who now need to file quarterly statements instead of monthly filings.
• Boost for handicrafts exports: The deadline for exporting handicrafts made from duty-free inputs has been increased from six months to one year, with a further three-month extension available.

These initiatives reflect the government’s commitment to simplifying trade regulations and enhancing India’s export potential, particularly in sectors like manufacturing and handicrafts.