Clarification on Insurance Amount and Bond Value for CCSPs & validity of Bond for AEO-LO

CBIC issues clarification on Insurance amount and Bond Value for Custom Cargo Service Providers CCSPs and validity of Bond for AEO-LO

Circular No. 22 /2024-Customs

File No. 520/32/2022-Cus-VI
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
Customs Policy Wing

Room No. 252A, North Block, New Delhi
Dated: 08-11-2024

To,
All   Principal   Chief   Commissioners/ Chief   Commissioners   of   Customs/ Customs(Preventive) /Customs & Central Taxes,
All Principal Commissioners/Commissioners of Customs/Customs (Preventive),
All Principal Director Generals/Director Generals of Directorates under CBIC.

Subject: Clarification on Insurance Amount and Bond Value for CCSPs and validity of Bond for AEO-LO-reg.

Madam/Sir,        

Kind attention is invited to Board’s Circular No. 42/2016-Customs dated 31.08.2016 which  provided  that  average  time  taken  for  clearance  of  goods  should  be  a  relevant factor  in  deciding  amount  of  insurance  and  accordingly  prescribed  10  days  as  an average dwell time to be considered while calculating the insurance amount as provided under Regulation 5(1)(iii) of the Handling of Cargo in Customs Areas Regulations, 2009 (hereinafter referred to as HCCAR).

1.2  Further, attention is also invited to the Board’s Circular No. 32/2013-Customs dated 16.08.2013  which  additionally  clarifies  that  the  custodian  bond  executed  by  CCSPs under Regulation 5(3) shall remain valid till the validity of approval granted to Customs Cargo Service Providers (CCSPs) under Regulation 10.

2. It has been represented to the Board that the guidelines prescribed vide the above referred circulars may be reviewed for reduction of cost incurred on insurance amount by Customs Cargo Service Providers (CCSPs) under Regulation 5(1)(iii) of HCCAR, 2009 by also bringing the attention of the Board regarding the reduction in average dwell time of imported goods and transit time for export goods.520/32/2022-Cus-VII/101070/2024

3. The matter has been examined. In view of the present NTRS data and as a measureof Ease of Doing Business, it has been decided to partially modify the earlier Circular No.42/2016-Customs dated 31.08.2016 with regard to Regulation 5(1)(iii) of HCCAR, to laydown that  the  amount  of  insurance  to  be  provided  by  CCSPs  should  be  equal  to  theaverage  value  of  goods  likely  to  be  stored  in  the  Customs  area  for  a  period  of  5  days(based  on  projected  capacity)  and  for  an  amount  as  Commissioner  of  Customs  may specify  having  regard  to  the  goods  that  are  already  insured  by  the  importers  or exporters.  Corresponding  changes  have  also  been  carried  out  in  Regulation  5(3)  of HCCAR, 2009 vide Notification No. 75/2024-Customs (N.T.) dated 07.11.2024 to reduce the value of custodian bond being furnished in respect of imported/export goods to the extent  of  5  days  storage  from  the  current  10  days  as  stipulated  in  Notification  No.115/2016-Customs (N.T.) dated 26.08.2016.

4. The  Notification  No.  75/2024-Customs  (N.T.)  dated  07.11.2024  also  amends Regulation 10 of HCCAR, 2009 providing that the approval for appointment of AEO-LOCCSPs as custodian has been made valid, till such time their AEO authorisation is valid and not suspended or revoked in terms of Regulation 12 of HCCAR, 2009. Accordingly,in terms of clarification provided in Circular No.32/2013-Customs dated 16.08.2013, the custodian bond executed by CCSPs i.e. ICDs/CFSs etc who are AEO-LO shall have the validity same as the validity of approval granted under Regulation 10 of HCCAR, 2009.

5. Suitable  Public  Notice  may  be  issued  by  the  jurisdictional  Pr.  Commissioners  or Commissioners.

6. Difficulty, if any, in the implementation of this circular may be brought to the notice of the Board.     

Hindi version follows.

Yours faithfully,

(Tribhuwan Yadav)
Dy. Commissioner /OSD, Cus-VI
[Email:- uscus6-dor@gov.in]

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