Tax Appeal to High Court-what constitutes Substantial Question of Law ?

Tax Appeal to High Court-what constitutes Substantial Question of Law ?

 Substantial Question of Law

The First Appellate Authority under the Income Tax Act, 1961 (the Act) is Commissioner of Income Tax (Appeals) [(CIT-A)]. The second appeal against the order passed by (FAA) lies to the Income Tax Appellate Tribunal (ITAT). Against every order passed by the ITAT, an appeal lies to the High Court. However, ITAT has been judicially held to be the final fact finding authority and even Courts can not go beyond it.

The Hon’ble Supreme Court in the context of a reference made u/s 256(2) answered by the Karnataka High Court [ABCAUS 890 (2016) (01) SC] stated as under:

“The legal position in this regard may be summed up by reiterating that it is the Tribunal which is the final fact finding authority and it is beyond the power of the High Court in the exercise of its reference jurisdiction to reconsider such findings on a reappraisal of the evidence and materials on record unless a specific question with regard to an issue of fact being opposed to the weight of the materials on record is raised…”

Right of appeal is not automatic. Right of appeal is conferred by the governing Statute. If the right of appeal conferred by the Statute is limited to cases where there is a substantial question of law, the High Court cannot sit in appeal over factual findings by re-weighing and re-analysing the evidence and materials on record.

Section 260A of the Income Tax Act contains the provisions with respect to appeal to High Court against the orders of ITAT. The sub section (1) categorically provides that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law.

The Supreme Court [ABCAUS 795 (2015) (08) SC] has held that in no circumstances the High Court can reverse the  judgment  of the trial court and  the  first  appellate  court  without  formulating  the substantial question of law and complying with  the  mandatory requirements of section 100 CPC.

A two Judge Bench of the Supreme Court summarized the following conclusion in this regard:-

(i) On the day when the second appeal is listed for hearing on admission if the High Court is satisfied that no substantial question of law is involved, it shall dismiss the second appeal without even formulating the substantial question of law;

(ii) In cases where the High Court after hearing the appellate is satisfied that the substantial question of law is involved, it shall formulate that question and then the appeal shall be heard on those substantial question of law, after giving notice and opportunity of hearing to the respondent;

(iii) In no circumstances the High Court can reverse the judgment of the trial court and the first appellate court without formulating the substantial question of law and complying with the mandatory requirements of Section 100 CPC

What constitutes a substantial question of law has extensively been discussed and explained by the Supreme Court in various decisions. 

It is now well settled that the principles for determination of existence of substantial question of law as laid down by the Supreme Court in the context of second appeals under the Civil Procedure Code would apply to appeals under Section 260 A of the Income-Tax Act.

The phrase “substantial question of law”, as occurring in the amended Section 100 CPC is not defined in the Code. However, the Hon’ble Supreme Court from time to time has deliberated on the principles and tests for deciding whether the questions involved in an appeal are substantial questions of law as under:

(i) The word substantial, as qualifying “question of law”, means—of having substance, essential, real, of sound worth, important or considerable. It is to be understood as something in contradistinction with—technical, of no substance or consequence, or academic merely.

(ii) As the legislature has chosen not to qualify the scope of “substantial question of law” by suffixing the words “of general importance” as has been done in many other provisions such as Section 109 of the Code or Article 133(1)(a) of the Constitution. The substantial question of law on which a second appeal shall be heard need not necessarily be a substantial question of law of general importance.

(iii) When a question of law is fairly arguable, where there is room for difference of opinion on it or where the Court thought it necessary to deal with that question at some length and discuss alternative views, then the question would be a substantial question of law. On the other hand if the question was practically covered by the decision of the highest court or if the general principles to be applied in determining the question are well settled and the only question was of applying those principles to the particular fact of the case it would not be a substantial question of law.

(iv) The proper test for determining whether a question of law raised in the case is substantial would be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by the Supreme Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. If the question is settled by the highest court or the general principles to be applied in determining the question are well settled and there is a mere question of applying those principles or that the plea raised is palpably absurd the question would not be a substantial question of law.

(v) To be “substantial” a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of the case, if answered either way, insofar as the rights of the parties before it are concerned. To be a question of law “involving in the case” there must be first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case.

(vi) An entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter.

(vii) It will depend on the facts and circumstance of each case whether a question of law is a substantial one and involved in the case or not, the paramount overall consideration being the need for striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis.

(viii) An inference of fact from the recitals or contents of a document is a question of fact. But the legal effect of the terms of a document is a question of law. Construction of a document involving the application of any principle of law, is also a question of law. Therefore, when there is misconstruction of a document or wrong application of a principle of law in construing a document, it gives rise to a question of law.

(ix) The High Court should be satisfied that the case involves a substantial question of law, and not a mere question of law. A question of law having a material bearing on the decision of the case (that is, a question, answer to which affects the rights of parties to the suit) will be a substantial question of law, if it is not covered by any specific provisions of law or settled legal principle emerging from binding precedents, and, involves a debatable legal issue.

(x) A substantial question of law will also arise in a contrary situation, where the legal position is clear, either on account of express provisions of law or binding precedents, but the court below has decided the matter, either ignoring or acting contrary to such legal principle. In the second type of cases, the substantial question of law arises not because the law is still debatable, but because the decision rendered on a material question, violates the settled position of law.

(xi) The general rule is that High Court will not interfere with the concurrent findings of the courts below. But it is not an absolute rule. Some of the well-recognised exceptions are where (i) the courts below have ignored material evidence or acted on no evidence; (ii) the courts have drawn wrong inferences from proved facts by applying the law erroneously; or (iii) the courts have wrongly cast the burden of proof. When we refer to “decision based on no evidence”, it not only refers to cases where there is a total dearth of evidence, but also refers to any case, where the evidence, taken as a whole, is not reasonably capable of supporting the finding.”

Therefore, while drafting a writ ot Tax Appeal care should be taken that questions raised does meet the tests laid down by the Supreme Court for holding that the questions raised are substantial questions of law, else, the High Court would not entertain the appeal.

Last Date for Payment of Gst and Filing of Return for July 2017 Extended By 5 Days to 25th August 2017

Last Date for Payment of Gst and Filing of Return for July 2017 Extended By 5 Days to  25th August 2017 by the GST Implementation Committee

Gst and Filing of Return for July 2017

Press Information Bureau 
Government of India
Ministry of Finance
19-August-2017 19:18 IST

Last Date for Payment of Gst and Filing of Return For July 2017 Extended By 5 Days 

The GST Implementation Committee, consisting of State and Central Government officers, has taken a decision to extend the last date for payment of the GST for the month of July 2017 to 25th August, 2017. 
 
Earlier the last date for payment of taxes and filing of GST Return in Form 3B for the month of July was kept as 20thof August 2017.  Since it is the first Return to be filed under GST, the tax payers and the tax practitioners have requested for few more days to file their Return.  Also there have been requests from States which are hit with floods to extend the last date for filing of GST Returns.  The State of Jammu & Kashmir has also requested for extension of time because of late passing of their GST Ordinance. Some technical glitches are also experienced by last minute return filers. 
 
It has been specified that for those tax payers, who do not want to avail of transitional credit in TRANS1 this month, the date for return filing will be 25th August 2017.  And for those who want to fill up TRANS1 this month, the last date for filing of returns will be 28th August 2017, as announced earlier. In order not to face any last moment technological difficulty in submission of return, all tax payers are requested to kindly file their return well before 25th / 28th of August 2017 and not wait for the last date. Suitable notification is being issued shortly.
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DSM/SBS

GST Sectoral Series FAQ on IT-ITES containing 26 Questions and Answers by CBEC

GST Sectoral Series FAQ on IT-ITES containing 26 Questions & Answers by CBEC on queris related to GST on Information technology/IT enabled sectors

GST Sectoral Series FAQ on IT-ITES

GST Sectoral Series FAQ on IT-ITES 

Question 1: Whether software is regarded as goods or services in GST?

Answer: In terms of Schedule II of the CGST Act 2017, development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software and temporary transfer or permitting the use or enjoyment of any intellectual property right are treated as services.

But, if a pre-developed or pre-designed software is supplied in any medium/storage (commonly bought off-the-shelf) or made available through the use of encryption keys, the same is treated as a supply of goods classifiable under heading 8523. 

Question 2: What are the implications of recognising the development, design, programming, customisation, adaptation, upgradation, enhancement, and implementation of information technology software as a service?

Answer: The primary implication is that the place of supply rules applicable to services would apply in determining taxability of the supply of software services. The same would be applicable in situations of supply of services involving a temporary transfer or permitting the use or enjoyment of any intellectual property right. The other implication is that the supplier of software services would not be eligible for the composition scheme.

Question 3: ‘A’ is a dealer in Computers and Computer parts having turnover of Rs. 8 lakh in a year; does ‘A’ have to register under GST?

Answer: Every supplier located in a State or Union territory, whose “aggregate turnover” in a financial year exceeds twenty lakh rupees, is liable to be registered under GST. This limit of turnover for a special category State is ten lakh rupees. ‘A’, whose aggregate turnover is only Rs. 8 lakh in a year, is therefore not liable to registration.

Question 4: The registered person ‘B’ receives small portions of software code from individuals which he then integrates and supply as a package to clients. These individuals are having small turnover of Rs 5 to 10 lakh, and therefore are not registered in GST. Whether there is any liability on ‘B’ in respect of services provided by such individuals?

Answer: If the supplies are made by unregistered suppliers, GST is liable to be paid by the recipient, who is a registered person, undersection 9(4) of the CGST Act, 2017. Therefore, in this case ‘B’ is liable to pay GST on services provided by these individuals.‘B’ can claim credit of this tax paid by him on reverse charge.

Question 5: What is the rate of tax on IT services?

Answer: The rate of GST on IT services is 18%

Question 6: Whether exports of software services attract GST?

Answer: Exports and supplies to SEZ units and SEZ developers are zero-rated in GST. Zero-rating effectively means that no tax is payable on exports but the exporter/supplier is entitled to the input tax credit on inputs/input services used in relation to exports. The exporters have two options for zero rating, which are as follows:

  1. To pay integrated tax on supplies meant to be exported and get refund of tax so paid after the supply is exported.
  2. To make export supplies under a bond or letter of undertaking and claim refund of taxes suffered on inputs and input services in relation to such exports.

Question 7: How do I determine whether IT services provided by me constitute export of service?

Answer: The supply of any service is considered an export of service, where the following conditions are met:

  1. the supplier of service is located in India;
  2. the recipient of service is located outside India;
  3. the place of supply of service is outside India;
  4. the payment for such service has been received by the supplier of service in convertible foreign exchange; and
  5. the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with explanation 1 of section 8 of the IGST Act, 2017.

Question 8: How do I determine the place of supply of IT/ITES services?

Answer: Place of supply of IT/ITES services is the location of the recipient in terms of section 12 and 13 of the IGST Act, 2017. However, if the recipient is not registered and his address is not available on the records of the supplier, the place of supply would be the location of the supplier.

Question 9: How to determine the location of the recipient?

Answer: Location of the recipient of service is defined in section 2(14) of the IGST Act. A recipient of services is treated as located outside India if his place of business where he receives services is outside India or, if he does not have a place of business, his usual place of residence is outside India.

Question 10: Would I be liable to pay GST on reverse charge even if the foreign supplier of software from whom I buy for use in my firm registered under GST was to accept the payment in Indian Rupees?

Answer: Yes, you would be liable to pay GST. A supply is treated as an import of service if the following conditions are satisfied:

(1) the supplier of service is located outside India;

(2) the recipient of service is located in India; and

(3) the place of supply of service is in India.

The place of such supply would be taken to be the location where the firm is registered (in GST) and the supplies would attract integrated tax (IGST). The factum of which currency was used to pay the consideration is immaterial.

Question 11: I am an Indian Company who makes software and sells it outside the country. I have hired a firm (not a related party) ‘C’ located abroad to facilitate the supply of software in Europe and the USA; would I be liable to pay GST on the payments that I make to this entity abroad?

Answer: No. In this case, ‘C’ is covered by the definition of ‘intermediary’ [section 2(13) of the IGST Act, 2017]. The place of supply of such intermediary service is location of the supplier in terms of section 13(8) of the IGST Act, 2017. As ‘C’ is located outside India, GST is not payable in this case.

Question 12: What factors determine the location of ‘C’ (in question 11) as being outside India?

Answer: In terms of section 2 (15) of the IGST Act, 2017, the location of a service provider is to be determined by applying the following steps sequentially:

(1) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;

(2) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;

(3) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of the supply; and

(4) in absence of such places, the location of the usual place of residence of the supplier.

The location of ‘C’ is to be determined by applying the criterion from (2), or (3), or as the case may be, (4).

Question 13: I am an agent in India of a foreign IT/ITES provider (principal located outside India). For agency services, I bill the principal in convertible foreign exchange. Whether GST liability arises in this case?

Answer: You are an intermediary and the place of supply of the service provided by you to the principal is in India irrespective of the mode of payment. Hence, GST is payable on the services provided by you as an intermediary to the principal.

Question 14: I have more than one SEZ unit in different States; do I need to take separate registrations? Also, I have two SEZ units in one State. Can I take a single registration?

Answer:

(1) Yes. Under GST, every entity shall take GST registration in each State from which it makes taxable supplies. However, a single registration can be taken for all your SEZ units within a State, whether located in one SEZ or more than one SEZ.

(2) A person having unit(s) in a Special Economic Zone as well as outside the SEZ in a State shall make a separate application for registration for SEZ unit(s) as a business vertical distinct from his other units located outside the Special Economic Zone in that State (Refer Rule 8(1) of CGST Rules, 2017).

Question 15: I have a unit in the DTA and another in the SEZ; can I take a common registration?

Answer: No. A person having unit(s) in a Special Economic Zone as well as outside the SEZ in a State, shall make a separate application for registration for SEZ unit(s) as a business vertical distinct from his other units located outside the Special Economic Zone in that State (Refer Rule 8(1) of CGST Rules, 2017). 

Question 16: If I supply a laptop bag along with the laptop to my customer, what would be the rate of tax leviable?

Answer: If the laptop bag is supplied along with the laptop in the ordinary course of business, the principal supply is that of the laptop and the bag is an ancillary. Therefore, it is a composite supply and the rate of tax would that as applicable to the laptop.

Question 17: I am obtaining online database access services from a company abroad over the net, would I have to pay tax on reverse charge?

Answer: The recipient, if registered, has to pay the applicable IGST on reverse charge basis. If the recipient is not registered, the matter is treated as an online information and database access or retrieval service (OIDAR) and the OIDAR service provider is liable to take registration and pay tax.

Question 18: When would it be construed that I have made a supply of services involving temporary transfer or permitting the use or enjoyment of any intellectual property right?

Answer: Generally, the End User Licence Agreement (EULA) is the legal contract between a software application author or publisher and the user of that application governing the usage. The agreement is renewable and/or could be amended from time to time. To find out as to whether there is an element of supply involved when software is delivered to its customer, the terms and conditions of EULA are material.

The contract for supply therefore assumes significance in this test to decide whether or not there has been ‘temporary transfer or permitting the use or enjoyment of any intellectual property right’.

Question 19: What special provisions are attracted in GST with regard to associated enterprises?

Answer: An enterprise which participates, either directly or indirectly, through one or more intermediaries, in the management, or control or capital of the other enterprise is an associated enterprise. In the context of GST, associated enterprise is particularly relevant in the case of supply of services, where the supplier is located outside India. In such cases, the time of supply will be the earlier of date of entry in the books of account of the recipient of supply or the date of payment – thus, within ‘associated enterprises’, the levy under GST is attracted once such book entries are made even if no actual payment takes place or no invoice is issued.

Question 20: What would be the tax liability on replacement of parts (no consideration is charged from a customer) under a warranty and whether the supplier is required to reverse the input tax credit?

Answer: As parts are provided to the customer without a consideration under warranty, no GST is chargeable on such replacement. The value of supply made earlier includes the charges to be incurred during the warranty period. Therefore, the supplier who has undertaken the warranty replacement is not required to reverse the input tax credit on the parts/components replaced.

Question 21: An Original Equipment Manufacturer (OEM) has an obligation to provide repair services to their customers in the warranty period. This activity is outsourced by OEM to ‘D’, who bills the OEM for the services he provides to the customer. What is the tax liability of ‘D’?

Answer: ‘D’ is providing service to the OEM. GST is payable on the value of any supplies made by ‘D’ to OEM i.e. in respect of bills raised by ‘D’ on the OEM.

Question 22: How will the defective parts be sent to the mother warehouse/repairing centre for repair by the downstream repairing centres? What is the tax liability?

Answer: The defective parts shall be sent for repair on a delivery challan accompanied by such e-way bill as may be prescribed. GST shall be chargeable on the repair amount, including the cost of parts, charged by the repairing centre.

Question 23: What is the tax liability in a scenario where supplies are made from multiple locations (in different States) of the supplier to the recipient under a single contract?

Answer: Delivering services from various locations and integrated pricing for the contract as a whole is the norm in IT/ITES industry. Normally the contract or agreement with the recipient is entered into by one of the branches (let us say “Main Branch”). Therefore, in such cases of service delivery from multiple locations of the supplier to the recipient, the supply could be visualized as consisting of two distinct supplies. First supply- the different branches of the supplier located across different States are making the supply to the main branch which entered into a contact or an agreement with the recipient for the supply of such service. Second supply- main branch is making a supply to the customer. GST is to be levied accordingly. In such a scenario, the main branch would get input tax credit of GST paid by the other branches on supplies made by them to the main branch.

Question 24: In the scenario envisaged in previous question, the main branch is said to be entitled to ITC of the GST paid by the other branches. Thus, it is a revenue neutral situation. What are the valuation guidelines for such services?

Answer: The second proviso to rule 28 of the CGST Rules, 2017 provides that where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of goods and services.

Question 25: Can payment of IGST on reverse charge basis on import of goods/services be done through book entry or ITC?

Answer: No. GST payable on reverse charge basis is to be discharged through cash only. Rule 85(4) of the CGST Rules, 2017 refers.

Question 26: Is the requirement of transferring of credit through ISD mechanism mandatory?

Answer: The ISD provision under the CGST Act, 2017 is not mandatory. It only provides the manner of distribution of ITC wherever the business entity wishes to distribute the ITC as an Input Service Distributor.

Note: Reference to CGST Act, 2017 includes reference to SGST Act, 2017 and UTGST Act, 2017 also.

GST SECTORAL SERIES FAQ- Gems and Jewellery containing 8 Questions & Answers

GST SECTORAL SERIES  FAQ- Gems and Jewellery

GST SECTORAL SERIES FAQ- Gems and Jewellery

GST SECTORAL SERIES  FAQ- Gems and Jewellery

Question 1: Whether advertising and communication material (banners/hoardings/posters) provided to distributors would be treated as supply in the course of business by the company thereby not requiring any reversal of ITC.

Answer:

(a) Where the material is provided free of cost:
This would not amount to a supply and hence no tax is payable on such transaction and in such a case credit availed by the company would need to be reversed in accordance with section 17(5) of the CGST Act, 2017.

(b) Where the material is provided for a consideration:
This would amount to a normal supply.

Question 2: Currently Banks do not pay any VAT on import of precious metals. Banks/nominated agencies pay only customs duty on imports. In the new regime of GST, will the Banks have to pay IGST while importing?

Answer: Yes, 3% IGST is payable on all imports of precious metals in addition to the basic customs duty. IGST paid can be taken as input tax credit by the banks.

Question 3: Banks import gold / silver on consignment basis wherein the ownership of the metal is with the supplier of the bullion which maybe an overseas entity. Is the overseas entity required to have GST registration because currently they do not file returns and are governed by multi-nation treaties?

Answer: This amounts to an import in accordance with the definition of the word “import” in the IGST Act, 2017 which provides that “bringing into India of any goods from any place outside India” is an import of the goods. What is material in this definition is the mere act of bringing into India; the ownership is not material for determining whether an import has taken place. Banks, being registered entities, would be liable to pay IGST on such imports but not the overseas entities since they are not effecting the import.

Question 4: Gold and silver imported by banks/nominated agencies on consignment basis are lying in stock as on 1st July. Clarification is required on how to charge the customers in transition phase from VAT to GST. Will customers be liable to pay GST rates?

Answer: GST is payable @ 3% with effect from 01.07.2017.

Question 5: Banks lend gold in physical form for a period not exceeding 6 months. Banks receive interest on the gold ounces disbursed and the same is converted into Rupees after calculation of interest on the ounces and the USD/INR conversion. Will the same methodology continue in case of GST as well wherein Banks shall pay a provisional GST (i.e. IGST/SGST/CGST) on ongoing market prices and pay the final GST as and when the prices are fixed?

Answer: Yes, Banks may avail of the benefit of provisional assessment provided under section 6o of the CGST Act, 2017. 

Question 6. Banks May pay provisional VAT currently at the time of delivery of gold on the basis of ongoing market prices. When customer fixes the price of metal, Banks pay actual VAT on the maturity date of the Gold Loan. Banks must be allowed to set-off the excess provisional GST paid to the government against future fixation of prices. In case of excess payment, the same should be refunded on Pan – India basis and not on the basis of States.

Answer: Banks may claim refund in accordance with the provisions of section 54 of the CGST Act, 2017. Interest is payable in such cases as provided in section 56 of the CGST Act, 2017. In this connection, section 60(5) of the CGST Act, 2017 may be referred to.

Question 7: When we are selling Gold, Diamond or Silver Jewellery to the end consumer (Customer) like a Gold Chain weighing 10 gm at a total value of Rs. 30,000/- (gold value is Rs. 28000/- and making charges on that gold chain is Rs 2000/-), can we charge GST @3% on the total value or @3% on the gold value and @5% on making charges?

Answer: GST is payable at the rate of 3% of the total transaction value of jewellery, whether the making charge is shown separately or not.

Question 8: When we issue gold as raw material to our Job Worker for Job Work and he returns that gold as finished goods,what GST treatment will be done and how to calculate the value?

Answer: The job worker, if registered, would be required to pay GST at the rate of 5% on job charges only. The jewellery manufacturer would in turn take credit of GST paid on such job work and may utilize the same for payment of GST on his outward supply of manufactured jewellery. However, if the job worker is exempted from registration, the jewellery manufacturer would be required to pay GST on his input supply from the job worker [of jewellery made out of precious metal given by him] on reverse charge basis. Nonetheless, he would be eligible to avail input credit of the tax so paid under reverse charge mechanism.

Note: Reference to CGST Act, 2017 includes reference to SGST Act, 2017 and UTGST Act, 2017 also.

Draft Customs Brokers Licensing and Revocation Regulations 2017-CBEC

Draft Customs Brokers Licensing and Revocation Regulations 2017 by CBEC. Customs Brokers shall be licensed by a written examination process

Draft Customs Brokers Licensing and Revocation Regulations 2017

Draft Customs Brokers Licensing and Revocation Regulations 2017

CBEC has issued  Draft  Customs Brokers Licensing and Revocation Regulations, 2017.  As per the Regulations, Customs Brokers shall be licensed and no person shall be able to carry on business as a Customs Broker relating to the entry or departure of a conveyance or the import or export of goods at any Customs Station unless such person holds a licence granted under these regulations.

“Customs Broker ” has been defined to mean a person licensed under these regulations to act as an agent on behalf of the importer or an exporter for purposes of transaction of any business relating to the entry or departure of conveyances or the import or export of goods at any Customs Station including audit.

The Directorate General of Performance Management (DGPM) shall in the month of April of every year invite applications for conducting examination and subsequent grant of licence to act as Customs Broker. An applicant, who satisfies the requirements  shall be required to appear for a written as well as oral examination conducted by the DGPM.

Among others, PAN and Aadhaar have been made a mandatory conditions to be fulfilled by the applicants for the examination of Customs Brokers.

The applicant who has passed the oral examination shall, on payment of fee of five thousand rupees shall be granted a license. A customs broker’s license may be granted to any company, firm, association, or partnership if at least one director, partner, or an authorized employee as the case may be has passed the examination.

A licence granted shall be valid for a period of ten years from the date of issue and shall be renewed from time to time.

The applicant who has been granted licence shall be eligible to work as Customs Broker in all Customs Stations subject to intimation to the Principal Commissioner or Commissioner of Customs of the customs station where he intends to transact business.

The license can be revoked, suspended if the Custome Broker fails to comply with any of the conditions of the license or commits misconduct or acquires any disqualifications subsequent to the grant of the license.

Penalty may also be imposed on a Customs Broker who contravenes any provisions of Regulations or who fails to comply with any provision of the Regulations