PremiumExperts said the government has also eased the procedure for compounding of such offences, along with directions to the principal chief commissioners and chief commissioners for timely disposal of applications within six months
Listen to this article |
NEW DELHI: The Central Board of Indirect Taxes and Customs (CBIC) has toned down penalty provisions for wrongful publication of trade related transaction data introduced in the customs law earlier this year.
The indirect tax authority has now allowed compounding of the offence, avoiding prosecution by paying a fee, as per an official order.
The penalty provision--section 135AA of the Customs Act--was introduced earlier this year through the Finance Act of 2022 to prevent unauthorised publication of commercially identifying and sensitive details of transactions by private parties. The provision covered illicit publication of data relate to import, export, description, quantity, value, classification etc. It provided for imprisonment up to six months or a fine up to ₹50,000 or both on anyone involved.
The Customs (Compounding of Offences) Amendment Rules, 2022, effective from 22 August, adds section 135AA of the Customs Act as one on which compounding is allowed. The compounding fee is ₹100,000 for the first offence, which becomes 100% of the amount for each subsequent offence, showed the order.
Experts said the government has also eased the procedure for compounding of such offences, along with directions to the principal chief commissioners and chief commissioners for timely disposal of applications within six months. This is a welcome move, said Sanjay Chhabria - Director, Indirect Tax at Nexdigm, a consultancy.
“The purpose of bringing section 135AA under Compounding Rules appears to provide an opportunity to the offender to get rid of the prosecution by paying a higher amount of fine," said Chhabria.
The changes also simplify the procedure followed by the compounding officer and drops the requirement of officer’s satisfaction on co-operation by the applicant during the proceedings. This change removes the biasness of the officer, explained Chhabria.
The government had introduced the penalty provision to deal with websites that sell data about the name of the merchant, description of goods, quantity, value, classification, among others. Selling commercially sensitive information is believed to adversely impact the competitive position of Indian exporters in international trade. The changes rationalise the penalty provision with a fee.