CUSTOMS BROKER’S LICENCE

[Mr. M. GOVINDARAJAN]

Regulation

Section 146 (1) of the Customs Act, 1962 (‘Act’ for short) provides that no person shall 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 in this behalf in accordance with the regulations.  Section 146(2) of the Act gives powers to the Board to make regulations.  Under this power the Board made ‘The Customs Brokers Licensing Regulations, 1984’ which was replaced by ‘The Customs Brokers Licensing Regulations, 2004’ with effect from 23.02.2004. .  The said regulation has been supersessed by another regulation ‘The Customs Brokers Licensing Regulations, 2013’  which came into effect from 21.06.2013.  The same has been replaced by ‘The Customs Brokers Licensing Regulations, 2018 which came into effect from 14.05.2018.

Customs broker

The expression ‘Customs broker’ is defined under Regulation 2(1)(d) as 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.

Licence

Regulation 3 provides that no person shall carry on business as a Customs Broker relating to the entry or departure of a conveyance or the import or export of goods including work relating to audit at any Customs Station unless such person holds a license granted under these regulations.  The licence is not required to be obtained in the following cases-

• an importer or exporter transacting any business at a Customs Station solely on his own account;
•  any employee of any person or a firm transacting business generally on behalf of such person or firm, and holding an identity card or a temporary pass issued by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be; and
• an agent employed for one or more vessels or aircrafts in order solely to enter or clear such vessels or aircrafts for work incidental to his employment as such agent.

Examination

The Directorate General of Performance Management (DGPM) shall in the month of August of every year invite applications for conducting examination and subsequent grant of license to act as Customs Broker in Form A by publication in two leading national daily newspapers in English and Hindi in addition to disseminating the information on the web portal.  The person who wants to be a customs broker has to apply at that time in Form A along with fee of Rs.500/- to the Principal Commissioner of Customs or Commissioner of Customs having the jurisdiction over the area where the applicant intends to carry on this business.

The applicant, before applying for examination, shall ensure that the following conditions-

• he is a citizen of India;
• he is a person of sound mind;
• he is not adjudicated as insolvent;
• he holds an aadhaar number;
• he holds a valid PAN number;
• he has not been penalized under erstwhile Central Excise Act or service tax provisions  or GST Act or IGST Act;
• he has neither been convicted by a competent court for an offence nor any criminal proceeding is pending against him in any court of law;
• an individual or in case of a firm or a company, the partner or authorized employee of the company who may handle the Customs work shall-

• be a graduate from a recognized University; and
• possess master degree in Accounting, Finance or management; CA/CS/CMA/MBA/LLM or diploma in Customs Clearance work from any University or having two years experience in transacting Customs Broker work as G-card holder;

• the applicant has financial viability as evidenced by a certificate issued by a Scheduled Bank or such other proof acceptable to the Principal Commissioner of Customs or Commissioner of Customs in terms of possession of assets of value of not less than Rs.5 lakhs.

A retired Group A officer from the Indian Revenue Service(Customs and Central Excise)having a minimum of  5 years’ experience in Group 'A' post shall also be eligible to apply for a license to act as a Customs Broker provided he satisfies the conditions specified above.

The applicant is to attend the examination online mode conducted by National Academy of Customs, indirect taxes and Narcotics.  The examination will be conducted in the first quarter of each year.  After passing the examination the applicant is to undergo oral examination during the second quarter of the year.  The applicant is allowed 6 attempts to clear the examination.  The applicant shall possess satisfactory English knowledge and local language of the Customs Station.  In North India Hindi is desirable.

Grant of licence

After passing the written examination and the oral examination the applicant is to pay Rs.5000/- within 2 months from the date of declaration of oral result.  The applicant is to inform the payment details to the Principal Commissioner of Customs or Commissioner of Customs as the case may be.  The payment particulars shall be verified by the Commissioner. The successful applicant to enter into a bond in Form D and where specified a surety bond in Form E for due observance of these regulations and furnish a bank guarantee, or a postal security or National Saving Certificate or a fixed deposit receipt issued by a nationalized bank, in the name of the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, for an amount of Rs.5 lakhs for carrying out the business as a Customs Broker. The licence, then, shall be issued to the applicant.  If the applicant fails to pay Rs.5000/- within 2 months, his right to get a licence will be forfeited. 

The licence will be in the Form B1 if the individual passed the two examinations.  In case of a firm or company the licence will be in the Form B2.  At any given time such director, partner or an authorized employee shall not engage himself for transacting business under these regulations on behalf of more than one such firm or company.  If there is any change in authorized person or partner the same shall be intimated to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, within 1 month from the date of such change.  If there is a change in PAN the licensee shall apply for a fresh licence to the authority concerned within 60 days of such change. 

The licensee shall be eligible to work in all customs stations subject to intimation in Form C to the Principal Commissioner or Commissioner of Customs of the Customs Station where he intends to transact business and a copy of this intimation shall also be sent to the Principal Commissioner or Commissioner of Customs who has issued the license in Form B1 or Form B2, as the case may be.  Such customs broker shall be able to transact such business only after a period of two years from the date of issue of license in Form B1 or Form B2.  The licence shall not be transferrable or assignable.

Validity

The licence shall be valid unless and until the same is revoked.  The license shall be deemed invalid, if the licensee is found to be inactive for a period of one year.  On an application made by the licensee in Form - I, after his license has been deemed invalid renew the license from the date of expiration, after satisfying himself that the applicant is otherwise eligible for grant of license  and upon payment of fee of Rs.15000/- by the Customs Broker within 1 month of the date of receipt of application.

Identity cards

A Customs broker who has been issued a license shall be issued a photo-identity card in Form F by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be:  Such employee will be given 4 chances to pass the examination.  On passing the examination he will be issued an identity card in Form G.  The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, shall issue a photo-identity card to every person employed by a Customs Broker in Form H in case he has not passed the examination for a period of 5 years provided the employee obtained a minimum educational qualification of 10+2.  If there is any change in the above cards the same shall be intimated to the Authority concerned.  No other person shall be allowed to work with such card.

 Surrender of licence

A licensee may surrender the license granted under these regulations  through a written request to the Principal Commissioner of Customs or Commissioner of Customs who has issued the license, as the case may be.  The Authority may revoke the licence if the licencee paid all the dues and there is no case pending against him.

Suspension of licence

The Principal Commissioner or Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the license of a Customs Broker where an enquiry against such Customs Broker is pending or contemplated.  The Authority may deem fit for reasons to be recorded in writing, he may suspend the license for a specified number of Customs Stations.  On suspension the Authority shall, within 15 days from the date of such suspension, give an opportunity of hearing to the Customs Broker whose license is suspended and may pass such order as he deems fit either revoking the suspension or continuing it, as the case may be, within 15 days from the date of hearing granted to the Customs Broker.

Revocation of licence

The Authority concerned shall revoke the licence and order for forfeiture of part or whole of security on the following grounds-

• failure to comply with any of the conditions of the bond executed by him;
•  failure to comply with any of the provisions of these regulations, within his jurisdiction or anywhere else;
• commits any misconduct, whether within his jurisdiction or anywhere else which in the opinion of the Principal Commissioner or Commissioner of Customs renders him unfit to transact any business in the Customs Station;
• adjudicated as an insolvent;
• of unsound mind; and
• convicted by a competent court for an offence involving moral turpitude or otherwise.

Penalty

The Principal Commissioner or Commissioner of Customs may impose penalty not exceeding Rs.50000/- on a Customs Broker or F card holder who contravenes any provisions of these regulations or who fails to comply with any provision of these regulations.        

The Deputy Commissioner or an Assistant Commissioner of Customs may impose penalty not exceeding ten thousand rupees on a G card holder who contravenes any provisions of these regulations in connection with the proceedings against the Customs Broker.

Appeal

A Customs Broker or F card holder, who is aggrieved by any order passed by the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, may prefer an appeal to the Customs, Central Excise and Service Tax Appellate Tribunal.  A G card holder aggrieved by any order passed by the Deputy Commissioner or Assistant Commissioner of Customs under these regulations may prefer an appeal to the Commissioner of Customs(Appeals) against the orders of the Deputy Commissioner or Assistant Commissioner of Customs, as the case may be, who shall proceed to decide the appeal expeditiously within 2 months of the filing of the appeal.