Electronic Cash Ledger (ECL) Under Customs From 01st April 2023

The Central Board of Indirect Taxes and Customs (CBIC) implemented the functionality of the Electronic Cash Ledger (ECL) as per Section 51A of the Customs Act, 1962. As per this provision, the exporter, importer or any other person liable to pay taxes, fees, duty etc. shall make a non-interest-bearing deposit in the ECL under customs for the purpose of paying the aforementioned liability. 

The operation of the ECL under customs is regulated by the Customs (Electronic Cash Ledger) Regulations, 2022. As the necessary infrastructure was pending development, the deposits under electronic cash ledger under customs law were exempted till 31st March 2023 by the issue of Notification No. 47/2022-Customs (NT) dated 31st May 2022. Now, the ECL has been enabled in a phase-wise manner starting from 1st April 2023. Here’s the implementation roadmap of the electronic cash ledger under Customs law.

Phases for Implementation of Electronic Cash Ledger Under Customs

Here are the phases in which the Electronic Cash Ledger has been implemented under the Customs:

First Phase: 1st April 2023 to 30th April 2023

The requirement to deposit in the ECL under customs has been exempted for the following:

1. Deposits in relation to the import and export of goods in the customs station where the Customs Automated Systems are not in place.
2. Deposits in relation to the accompanied baggage.
3. Deposits in relation to the goods exported or imported at the International Courier Terminals. 
4. Deposits, excluding those used for making electronic payments of:
   • Any duty of customs. This includes surcharge and cess levied as duties of customs.
   • Integrated Goods and Services Tax (IGST)
   • GST Compensation Tax
   • Penalty, fees and interest payable under the Customs Act or Customs Tariff Act, 1975.

Second Phase: From 1st May 2023

Following are the important points in relation to the second phase of implementation:

1. The above exemptions will continue except for the deposits in relation to the goods imported or exported at the International Courier Terminals. In essence, payments in relation to the courier shipments would be required to be done through the ECL from 1st May 2023 onwards.
2. Point 4 above highlights that electronic payments are not covered under the exemption of ECL under customs. Therefore, payments made through TR-6 challan for different purposes through the authorised bank counter of the Customs location will be exempted from the provisions of Section 51A until it is migrated to the electronic cash ledger in the subsequent phases. 

The phase-wise introduction of this functionality is aimed towards leveraging technology and transforming the payment process and clearance of goods under customs law. This will further help ease the compliances in numerous ways. 

Registration Requirements for ECL Under Customs

You need to register yourself in ICEGATE by creating an account for availing of the ECL functionality under customs. Apart from the importers and exporters (IECs), ECL is also enabled for the couriers and customs brokers that make payments on behalf of the exporters and importers. Importers that are allotted Unique Identification Number (UIN) as per the GST Law can also use the ECL. 

Deposits and Payment of Liabilities to ECL

You can make the payment for your liabilities by generating a deposit challan in the ECL and using the payment modes authorised. After a successful deposit, the amount will reflect in the ECL portal of customs. You can utilise the deposited amount by selecting the payment challan created at the ECCS/ICES or any other application using ECL as the mode of payment. 

You can also make customs payment through ECL without first depositing the amount in the same. You can select the payment challan, choose your preferred mode of payment (i.e., NEFT/RTGS/net banking) and complete the process of payment. A deposit challan of the same amount will get generated. The amount will get deposited as well as get debited from the ECL. You can reinitiate the payment in case the payment challan is rejected.

Refund of ECL Balance Under Customs

In case the balance is left after utilising the deposit for payment, the remaining balance can be used for subsequent payments. Otherwise, you can apply for a refund of the remaining balance. The amount applied for the refund won’t be available for use and it will get credited to the bank account registered on the Customs Automated Systems. 

Following were the complete details pertaining to the ECL under Customs. For any assistance or queries, feel free to contact the ASC Group.

Also Read - Electronic Credit Ledger in GST

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