Customs Brokers under Customs Act, 1962

Have you ever heard about customs brokers? Customs brokers are professionals responsible for professional services by handling the process of customs clearance for you during shipping. The customs broker has the task that the shipment meets all regulations for the import or export of goods and its standards. In this article, we will discuss in detail the Customs Brokers under Customs Act 1962.

What are Customs Brokers? 

There is no requirement to use customs brokers in India. If an exporter or importer selects to be represented by a customs broker, section 146 of the Customs Act, 1962 (No. 52 of 1962) comes into play. It provides that only a licensed customs broker can deal with the entry or exit of a shipment or import or export of goods at any customs station.

What does Section 146 say?

Section 146 of the Customs Act, 1962 provides that no person shall act as an agent in respect of the entry or departure of carriage or the importation or exportation of goods unless such person holds a license granted according to the regulations made on that behalf by the directors. Any person who wishes to carry on business as a customs broker in connection with the entry or departure of shipments or the importation or exportation of goods at any customs station is therefore required to obtain a license which is referred to as a customs broker’s license and the person concerned as a customs broker. 

The Customs Brokers Licensing Regulations (CBLR), 2018 governs the legal and procedural aspects of the grant of a Customs Broker license.

Applicability of Customs Broker License 

Regulation 4 of the CBLR 2018 provides that the National Academy of Customs, Indirect Taxes, and Narcotics (NACIN) shall call for applications every year in April for the examination and license grant. An application in Form A along with a fee of 500 rupees is submitted to the Chief Commissioner of Customs or the Commissioner of Customs having jurisdiction over the area where the applicant wishes to trade. 

Eligibility for Customs Broker License

Regulation 5 of CBLR 2018 states that the applicant must be an Indian citizen, of sound mind, holder of a valid PAN card, not adjudicated as insolvent having an Aadhaar number, and confirming financial viability by the certificate issued by a Scheduled Bank or other document admissible to the Chief Commissioner of Customs or Commissioner of Customs evidencing ownership of assets worth at least Rs.5 lakhs.

In addition, the individual applicant or, in the case of a company, its partner or, in the case of a company, its director or authorized employee who can perform customs work, must be a graduate of a recognized university and have a professional education such as a master’s or equivalent degree in accounting, finance or management, CA/CS/MBA/LLM/ACMA/FCMA or Diploma in Customs Clearance from any recognized institute by government. The applicant may have at least two years of experience in customs transactions Broker working as a G-Card holder. 

Other conditions to be fulfilled by the applicant are: 

• The applicant has not been convicted by a competent court no criminal proceedings are pending in any court for or against the offense; 
• The applicant has not been punished for any offense under the Act, Central Excise Act, 1944 (1 of 1944), Finance Act, 1994 (32 of 1994), Central Goods and Services Act, 2017 on goods and Services Tax Act, 2017 (13 of 2017).

Bond for Grant of License

The Commissioner of Customs shall, on payment of Rs.5000, within two months of the declaration of the results of the oral examination, grant the license to the applicant within one month of the payment of the said fee. Such licensed customs broker may work at all customs stations on the notification in Form C to the Chief Commissioner or Commissioner of the customs station where he intends to do business. 

The Chief Commissioner or the Commissioner of Customs shall, before granting the license, ask the applicant to enter into a bond in this regard for proper compliance with these regulations and also require the submission of a bank guarantee, postal security or National Saving Certificate or fixed deposit certificate issued by a nationalized bank on behalf of the Chief Commissioner of Customs for Rs.5 lakhs for carrying out business as a customs broker.

Validity of License

A license granted under Regulation 7 shall be valid for 10 years from the date of issue and shall be renewed from time to time if the performance of the licensee is found to be satisfactory, inter alia concerning the duty laid down for Customs in the CBLR 2018 including the absence of any complaints of wrongdoing. The license can be renewed for another 10 years by the Chief Commissioner or the Commissioner of Customs on payment of a fee of Rs.15, 000. 

In case the customs broker does not apply for renewal before the expiry of the license, the Chief Commissioner or the Commissioner of Customs after satisfying himself as to the genuineness of the reasons for the delay may renew the license on payment of two thousand rupees as default fee by the customs broker in addition to the renewal fee.

License validity period

A license granted under the Customs Agents Licensing Regulations 1984, the Customs Agents Licensing Regulations 2004, the Customs Brokers Licensing Regulations 2013, or the Customs Brokers Licensing Regulations 2018 is not valid unless and until revoked within the meaning of a provision under sub-regulation (2) of regulation 8A or regulation 14. Notwithstanding anything contained above, a license shall be deemed to be invalid if the licensee is found to be inactive for one year.

Final words

Customs brokers are hired by the importer/exporter to clear the goods from the bonded warehouse. Customs clearance carried out by the CB includes assessment, an inspection of export/import goods, and their clearance according to the applicable provisions of the law. For the above Act, they are duly authorized by the importer/exporter as per the provisions of CBLR, 2018.