Question:

Scenario: A junior employee of a Customs Broker clears goods without holding a valid G-
card. Is this permissible?

Answer:

No, this is not permissible. Based on Regulation 7(4) under the Customs Broker Licensing
Regulations (CBLR), 2018, the following conditions apply:

 Regulation 7(4) clearly states:

"No person shall act as a Customs Broker unless he holds a valid G-card issued by the
Principal Commissioner or Commissioner of Customs, as the case may be."

 In this scenario, since the junior employee is clearing goods without holding a valid
G-card, they are violating this regulation. A G-card is necessary for any person to act
on behalf of a Customs Broker in the clearance of goods.

 Moreover, it is required that a Customs Broker only authorizes individuals holding a

valid G-card to perform clearance operations. The absence of a valid G-card for this
employee would render their actions unauthorized.

Therefore, clearing goods without a valid G-card violates Regulation 7(4) of CBLR 2018,
making it impermissible for the junior employee to carry out the clearance process.

Question:

Scenario: A junior employee of a Customs Broker clears goods without holding a valid G-
card. Is this permissible?

Answer:

Based on the provided Regulation 7, particularly the requirement for a valid license to
operate as a Customs Broker, the answer is no, it is not permissible for the junior employee
to clear goods without holding a valid G-card.

Here’s why:

 Regulation 7 specifically mandates that to act as a Customs Broker, the individual

must be licensed. This applies whether the individual is a full-time employee of a
firm, a company, or working for a Customs Broker organization.

 Under Regulation 7(2), an individual Customs Broker can be granted a license in

Form B if they have passed the necessary examinations and meet other criteria. For a
company or firm to operate as a Customs Broker, at least one authorized employee
or director needs to be licensed.

 Further, under Regulation 7(4), the individual acting on behalf of the Customs Broker
must hold a valid G-card to carry out clearance or transaction-related duties. A G-
 card is necessary for any employee of a licensed Customs Broker firm to engage in
clearance activities at the Customs station.

 The lack of a valid G-card in this scenario violates the requirement of a licensed
employee to carry out Customs clearance. Without the G-card, the employee is not
authorized to represent the firm in clearance activities at the Customs Station.

Thus, the junior employee clearing goods without a valid G-card violates Regulation 7,
specifically the requirement for authorized individuals (with a valid G-card) to transact
business on behalf of a licensed Customs Broker.

Q3. During an audit, a Customs Broker fails to provide records of transactions from 3 years
ago. What regulation does this violate?

Answer:

The Customs Broker's failure to provide records of transactions from 3 years ago violates
Regulation 10(p) of the Customs Brokers Licensing Regulations (CBLR) 2018.

Regulation 10(p): Maintenance of Records

This regulation states that:

 A Customs Broker is required to maintain all records and accounts that are required
under the regulations.

 These records must be preserved for at least five years.

 The records should be made available for inspection by authorized Customs

authorities at any time.

Failure to provide records from the required period of five years means the Customs Broker
is not in compliance with this regulation.

Clause reference:

 Regulation 10(p): "Maintain all records and accounts that are required to be
maintained under these regulations and preserve for at least five years, and all such
records and accounts shall be made available at any time for the inspection of
officers authorised for this purpose."

Example: If the Customs Broker is unable to provide records from 3 years ago, it could lead
to penalties or further action as per the violation of the record-keeping and compliance
obligation under Regulation 10(p). The regulation emphasizes that records must be
preserved for a minimum of five years, which includes transaction records, financial
documentation, and other relevant business papers.

Q4. A Customs Broker wants to start operations at a new Customs Station. What steps
must they take under CBLR 2018?
Answer:

Under the Customs Brokers Licensing Regulations (CBLR) 2018, the following steps must be
taken by a Customs Broker to start operations at a new Customs Station:

1. Intimation to Principal Commissioner or Commissioner of Customs:

o The Customs Broker must intimate the Principal Commissioner or

Commissioner of Customs of the Customs Station where they intend to start
operations.

o The intimation must be made in Form C.

o A copy of this intimation must also be sent to the Principal Commissioner or

Commissioner of Customs who granted the Customs Broker's license.

2. Conditions for Transacting Business:

o A Customs Broker can only begin transacting business at the new Customs
Station after a period of two years from the date of issuance of the license.

o However, this two-year waiting period can be waived for brokers who have
been granted a license under the previous Customs House Agents Licensing
Regulations (1984, 2004, or 2013), or for other specific situations as per the
regulations.

3. License Issuance:

o The Customs Broker must ensure that they have a valid license issued in Form
B1 or Form B2 and then follow the necessary steps to inform the new
Customs Station about their intention to operate there.

o The Customs Broker should comply with all regulatory requirements to

ensure they are eligible to transact business at the new station.

4. Communication of Changes:

o If there is any change in the business address or any other significant

information, the Customs Broker should inform the Deputy Commissioner or
Assistant Commissioner of Customs at the relevant station in Form C within
the stipulated time (usually 2 days, depending on the situation).

Relevant Regulation:

 Regulation 7(3): "The applicant who has been granted a license under sub-regulation
(2) shall be eligible to work as Customs Broker 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..."
  Regulation 7(4): "A customs broker shall be eligible to transact business under these
regulations at a customs station which requires intimation under the said Form C,
subject to the condition that 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."

Example:

A Customs Broker who has a valid license and has been operating in one Customs Station
wishes to expand their operations to another. They would need to submit Form C to the
Principal Commissioner of Customs for the new station, informing them of their intent to
begin operations there. If they have been licensed for fewer than two years, they must wait
until the waiting period is completed before starting operations at the new Customs Station,
unless they qualify for an exemption.

Q5. Explain the bond and security requirement for obtaining a Customs Broker license
under CBLR 2018.

Answer:

Under the Customs Brokers Licensing Regulations (CBLR) 2018, the following provisions
apply with regard to the bond and security requirements for obtaining a Customs Broker
license:

1. Bond Requirement:

o A Customs Broker must furnish a bond as part of the licensing process.

o The bond serves as a financial security to ensure that the Customs Broker will
fulfill their obligations and duties in compliance with the regulations and the
law.

o This bond is a safeguard against potential non-compliance, including failure to

settle dues to the Government or failure to meet obligations to clients.

2. Amount of Bond:

o The Principal Commissioner or Commissioner of Customs will specify the

amount of the bond. This amount is typically decided based on the nature of
the Customs Broker's operations and their estimated liability.

3. Security Requirement:

o In addition to the bond, the Customs Broker is required to provide security.

o This security is also to guarantee that the broker will adhere to the conditions
of the license, pay any dues, and fulfill any financial obligations arising from
their business activities.
 o The security may be in the form of a bank guarantee or other acceptable
forms of collateral.

4. Duration of Bond and Security:

o The bond and security will be required throughout the period during which
the Customs Broker is licensed.

o These will remain in place until the license is surrendered, revoked, or

otherwise terminated.

5. Enforcement of Bond and Security:

o If the Customs Broker fails to comply with the regulations or obligations

under the license, the security or bond may be forfeited.

o This ensures that the Customs Broker remains financially liable for fulfilling
their duties.

Relevant Regulation:

 The specifics of the bond and security requirement for obtaining a license under
CBLR 2018 can typically be found in Regulation 8 and Regulation 9 of the CBLR
(Customs Brokers Licensing Regulations), where the license grant process is detailed.
This regulation outlines the requirements for financial security, bonding, and the
conditions for their enforcement.

Example:

A newly licensed Customs Broker is required to submit a bond of ₹1,00,000 (as determined
by the Principal Commissioner of Customs) and a security in the form of a bank guarantee
to ensure their compliance with regulatory requirements. This ensures that the broker will
meet their financial and operational obligations. If the broker fails to pay any due duties or
taxes, or if they violate other conditions under the regulations, the bond or security may be
called upon by the Customs authorities.

Q6. What is the significance of Regulation 10(a) under CBLR 2018? Provide an example.

Answer:

Regulation 10(a) of the Customs Brokers Licensing Regulations (CBLR) 2018 mandates that
a Customs Broker must obtain authorization from each of the companies, firms, or
individuals they represent. This authorization must be produced upon request from the
Deputy Commissioner of Customs or Assistant Commissioner of Customs.

Significance of Regulation 10(a):

  Authorization Requirement: The regulation ensures that the Customs Broker is
officially authorized by the client (company, firm, or individual) to act on their behalf.
This is crucial to ensure that the broker is legally authorized to handle matters related
to customs clearance, duty payment, and other related activities.

 Accountability and Transparency: By requiring authorization, the regulation helps

establish a clear relationship between the Customs Broker and the clients they
represent. This ensures accountability on both sides. The Customs authorities can
verify that the Customs Broker is indeed representing a valid client and is not acting
without proper consent.

 Regulatory Compliance: The regulation facilitates compliance monitoring. Customs

authorities can ensure that brokers are not overstepping their boundaries or acting
without proper authorization, thereby minimizing fraud and potential violations of
customs laws.

 Verification of Clients: The requirement for authorization helps in verifying the

identity of the client and ensures that the broker is dealing with legitimate
businesses or individuals. This is particularly important to prevent illegal activities
such as misdeclaration or the clearance of prohibited goods.

Example:

Scenario:
A Customs Broker, Mr. X, has been hired by Company A to clear imported goods through the
customs. According to Regulation 10(a), Mr. X is required to obtain authorization from
Company A, confirming that Mr. X is allowed to act on behalf of the company in customs
matters.

 Mr. X collects a signed letter from Company A, officially authorizing him to clear
goods on their behalf.

 The Deputy Commissioner of Customs at the Customs Station requests Mr. X to

provide the authorization when processing a customs declaration.

 Mr. X provides the required authorization document from Company A, confirming

that he is legally acting on their behalf.

In this case, Regulation 10(a) ensures that Mr. X has the necessary authorization to
represent Company A before customs, verifying that he is not acting without their consent.

Regulation 10(a) - Authorization from Clients

This regulation requires Customs Brokers to obtain an authorization from each client they
are currently working with. They must produce this authorization when required by Customs
authorities (Deputy Commissioner or Assistant Commissioner of Customs).

Significance of Regulation 10(a):

This clause ensures that Customs Brokers operate with proper authority from the entities
they represent, ensuring legitimacy and accountability in their actions. Without proper
authorization, there’s a risk of unauthorized representation, which can cause legal issues and
jeopardize the trust between the Customs Broker, clients, and Customs authorities.

Example:

 A Customs Broker is representing a company to clear goods through customs. They

need to have a written authorization from the company confirming that they are
authorized to act on the company's behalf.

 If the Customs Broker cannot produce this authorization when requested by Customs
authorities, they would be in violation of Regulation 10(a), potentially leading to legal
consequences or revocation of their license.

In practice, this provision ensures that the Customs Broker does not act beyond the scope of
their authorization, safeguarding the interests of all parties involved.