CBIC raises monetary thresholds for customs offences

The Central Board of Indirect Taxes and Customs (CBIC) has raised the monetary thresholds for prosecution and arrest for customs offences.

There will be no prosecution against foreigners and non-resident Indians (NRIs) on detection of non-declaration of foreign currency, if it is legally acquired, said a CBIC circular issued on Wednesday.

The threshold for prosecution involving baggage has been increased to ₹50 lakh from ₹20 lakh. Similarly, for financial fraud, which includes duty evasion or wrong declaration, the threshold has been doubled to ₹2 crore.


The exemption, however, will not cover offences relating to items such as arms and ammunition, explosives, antiques, art treasures, wildlife items and endangered species of flora and fauna, irrespective of threshold.

"This move will help bringing more clarity for importers as well as the department," said Saurabh Agarwal, tax partner, EY.

He said the CBIC has not only increased the threshold for arrest, prosecution and bail but also provided a more illustrative list of scenarios where such provisions should be triggered.

"In an effective justice system prosecution and arrest should be initiated only in situations involving substantial duty evasion," according to Abhishek Jain, partner, indirect Tax, KPMG in India.

He said civil proceedings will continue for duty, interest and penalty recovery, and that "prosecution and arrest would be initiated in cases where the financial severity is high".

The rule will be applicable with immediate effect.

"All cases where sanction for prosecution is accorded after the issuance of this circular, shall be dealt in accordance with provisions of this circular irrespective of the date of offence," said the CBIC.