Insertion Of Sub-Sections 18(1B) And (1C) And Its Impact On Provisional Assessment Timeline In Cases Of Verification Of Origin In Terms Of FTA

The Finance Bill, 2025 seeks to amend Section 18 of the Customs Act, 1962 by way of insertion of sub-section 18 and sub-section 18. However, the time limit provided in sub-section 18 shall not be applicable from the date of provisional assessment in certain cases wherein the proper officer is unable to finalise the assessment of duty due to certain reasons. Analysis of Sub-section 18 of the Act Sub-section 18 specifically provides that when an information is being sought from an authority outside India through a legal process, the time limit of two years shall not be applicable from the date of provisional assessment. Computation of timeline for finalisation of assessment wherein the assessee has availed benefit of preferential rate of duty In view of the proposed provisions and relevant Rules of Origin, it seems that the exclusion under sub-section 18 shall be triggered in cases where the department has requested for information for the purposes of verification under FTA. Further, in cases wherein the department has sought information from the exporting country for verification of the origin conditions under FTA, the time limit for computing two years for finalisation of provisional assessment shall start from the date of receipt of the information from the exporting country.