The Central Board of Indirect Taxes and Customs (CBIC) has decided to enable Electronic Cash Ledger (ECL) in phases for importers and exporters effective April 1. As per Section 51A of the Customs Act, 1962, every assessee has to maintain an electronic cash ledger in the customs portal.

ECL is a non-interest-bearing deposit with the Government for payment of taxes and aims to ease the compliance. “The phased introduction of ECL is aimed at leveraging technology and reforming the payment process, inter-alia related to clearance of goods as the deposit may be held in ECL by the Trade for making subsequent transaction-wise payment of various types,” a CBIC circular said.

In the first phase, between April 1-30, exemptions to deposit in ECL will be restricted to deposits on goods imported or exported in customs stations where Customs Automated System is not in place. At the same time, deposits with respect to accompanied baggage and to the goods imported or exported at International Courier Terminals will be exempted. Deposits other than those used for making electronic payment of custom duty (including cess and surcharge), integrated tax, GST compensation cess and interest, penalty, fees or any other amount payable law will also be exempted.

All these but one exemption will continue in the second phase starting May 1. One which has been left out is deposits regarding goods imported or exported at International Courier Terminals. This means payments relating to courier shipments would be required to be done through ECL from May 1 onwards.

Procedure

Deposits under ECL provision requires the person to be registered at ICEGATE portal and to create an ECL account. In addition to importers/exporters (IECs), the customs brokers, couriers who are making payments on behalf of the importers/exporters are also enabled in ECL. Similarly, the importers who are assigned Unique Identification Number (UIN) under GST are also enabled in ECL. Once registered, deposit can be made using internet banking facility of 12 banks, including the SBI and PNB. Other banks are expected to join soon. The payment using the deposit available in ECL may be made by selecting the payment challan generated at the ICES/ECCS or other application, with ECL as a mode of payment.

The balance of deposits after utilising for payments may make use for subsequent transactions. However, if the refund is applied for, the amount applied for will no longer be available for use. After the refund decision, the amount would be credited to the bank account of the person registered on customs automated system.

Listing the advantages of new mechanism, CBIC says making deposits before goods arrival allows certainty in quick discharge of duty 24x7 for clearance. This will reduce instances of payment rejections and double duty payments, as rejected amount will stay at the ECL for re-initiating remittances. Importer who wishes to continue payment on transaction basis is provided an option to remit on the portal. Internally, the systems design takes care of routing the payments instantaneously through the ECL before accounting for duty payments.

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