Chatroom: How to reduce demurrage on detained import consignments | Economy & Policy News

We have imported certain goods by air where there is some dispute with Customs, and it is likely that the clearance may take some time. Is there any way to avoid demurrage?

Para 2.2 of the Central Board of Indirect Taxes and Customs (CBIC) customs manual 2025 says that imported goods are not to be detained on simple valuation or classification disputes. If it becomes necessary to detain the goods for investigation of any serious, suspected fraud, the importer/exporter must be intimated in writing that he may shift the goods to a bonded warehouse under Section 49 of the Customs Act, 1962 (CA62), with a clear indication that if he does not avail of this facility and the goods incur demurrage, he would have to bear the demurrage and other charges levied by the custodian/other agencies. So, you may request the Customs for shifting the goods to a public bonded warehouse. Section 49 storage is allowed initially for thirty days but extensions are allowed. Your rent and handling charges at the warehouse may be less than the demurrage. However, you must pay already  accrued demurrage. Also, please note that the provisions of Chapter IX of CA62 relating to warehousing shall not apply to goods permitted to be stored in a public warehouse under the section 49.

We have imported certain goods that we do not want now. The goods are in transit, and likely to arrive at the port soon. The supplier says that it is not feasible to divert the goods at this stage but has agreed to take back the goods. What is the procedure for re-export of the goods?

Section 54(1) of CA62 says that “where any goods imported into a customs station are intended for transhipment, a bill of transhipment shall be presented to the proper officer in such form and manner as may be prescribed.” Section 54(2) of CA62 says that ‘“subject to the provisions of section 11, where any goods imported into a customs station are mentioned in the arrival manifest or import manifest or the import report (collectively known as IGM), as the case may be, as for transhipment to any place outside India, such goods may be allowed to be so transhipped without payment of duty.”  

So, I suggest you approach the shipping line and ask them to mention in the IGM that the goods covered by your bill of lading as for transhipment to the port where the supplier wants the goods. After the shipping line does so, you may file a bill of transhipment in accordance with the said Section 54 of CA62. The Sea Cargo Manifest and Transhipment Regulations 2018 deal with the procedures.

Our auditors are asking for suitable provision to support our payment of simple interest when regularising defaults under advance authorisations and EPCG authorisations. Please guide.

The DGFT Policy Circular No. 25/97-98 dated November 17, 1997 clarifies that the interest to be paid for regularisation of defaults under advance authorisation is simple and not compound Interest.

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