Verification of identity has become mandatory for new importers, exporters and customs brokers. The government has stated that importers, exporter and customs brokers will need to verify their identity, including Incorporation Document, PAN, Aadhaar as well as Physical Verification of Place of business.

The Customs (Verification of Identity and Compliance) Regulations, 2021, also gives customs authorities the power to undertake identity verification of existing importers, exporters and customs brokers.

The person selected for verification would have to furnish to the Customs authorities documents or information on the Common Portal within 15 days of such intimation of selection.

These include document of incorporation, document evidencing appointment of authorised signatories, if applicable, Permanent Account Number; GST Identification Number; document such as bank statement, Income Tax Return etc. evidencing financial standing of the person.” a person who is newly engaging in import or export activity after the commencement of these regulations shall furnish the said documents not later than 30 days of engaging in import or export activity,” the regulations said.

Importers, exporters and customs brokers would have to undertake authentication of Aadhaar; and PAN verification on the Customs common portal.

After this, Customs authorities would undertake a physical verification of the address provided in the principal place of business within 45 days from the date of submission of the documents; and also evaluate the financial standing of the person.

According to EY Tax Partner Abhishek Jain, the government has recently brought in regulations under the GST law to identify fictitious entities and prevent fake invoicing under GST. Now, similar provisions have been introduced under the Customs law, whereby the new importers and exporters will have to undergo identity verification, including verification of incorporation documents, Aadhaar, PAN (for individual, karta, MD,etc) as well as the physical verification of the place of business.

“If any default is discovered, clearance of goods, drawbacks, refunds, etc can be suspended. Further, the Customs authorities have also been granted power to undertake this identity verification for existing players as well”, he said.

Further, Jain added, “Overall, this is a good move on the part of the Government from perspective of preventing revenue leakage and with GST collections on rise with the introduction of preventive regulations, it is hoped that these rules would lead to better Customs duty collection as well. Having said this, the Government will have to ensure that genuine taxpayers don’t face unnecessary hassles”.

AMRG & Associates Senior Partner Rajat Mohan said, “This verification would be on the lines of current procedures spelt out in GST regime especially in relation to Aadhaar authentication and physical verification. “These procedures being unambiguous and time bound will support compliant taxpayers to continue various benefits available under customs in a hassle-free manner.”