Hiking the financial threshold for prosecution and arrest, the Central Board of Indirect Taxes and Customs (CBIC) has issued revised pointers for prosecution, arrest and bail for offences underneath the Customs Act.
The pointers, dated August 16, specify that Rs 50 lakh can be the financial threshold in case of luggage and outright smuggling, whereas it will likely be Rs 2 crore for industrial fraud. The earlier thresholds have been Rs 20 lakh and Rs 1 crore, respectively.
While the Act doesn’t specify any worth limits for exercising the powers of arrest, it’s clarified that arrest in respect of an offence, must be effected solely in “exceptional situations”, the CBIC stated. Specifying such distinctive conditions, the CBIC stated they embody circumstances involving unauthorised importation in baggage/circumstances underneath Transfer of Residence Rules, the place the market worth of the products is Rs 50 lakh or extra or circumstances of outright smuggling of excessive worth items corresponding to valuable metallic, restricted gadgets or prohibited gadgets or items or offence involving overseas forex the place the worth of offending items is Rs 50 lakh or extra.
Further, circumstances associated to importation of commerce items (i.e. appraising circumstances) involving wilful mis-declaration in description of products/concealment of products, or import of restricted or prohibited gadgets the place the market worth of the offending items is Rs 2 crore or extra would entice arrest underneath customs act. Cases involving fraudulent responsibility evasion of Rs 2 crore or extra too entice arrest provision.
Saurabh Agarwal, tax associate, EY, stated, “This move will help in reducing litigation and bringing in better clarity for both importers & the customs department.”
Abhishek Jain, associate—oblique tax, KPMG in India, stated in an efficient justice system, prosecution and arrest must be initiated solely in conditions involving substantial responsibility evasion. “Pursuant to the revised monetary limits being prescribed by the government, going forward, while the civil proceedings would continue for duty, interest and penalty recovery, prosecution and arrest would be initiated in cases where the financial severity is high,” Jain stated.
