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Service Tax Act 2018: Amendment of Section 42: On Customs Ruling

Updated: Dec 9, 2023

"Section 42 - Customs Ruling" is read as follows:-

42(1) [Application made in prescribed form with prescribed fee]

Any person may apply, in the prescribed form together with the prescribed fee, to the Director General for a customs ruling in respect of any one or more of the following matters:

  1. the determination of a taxable service;

  2. the determination of a taxable person;

  3. the principles to be adopted for the purposes of determination of value of taxable service;

  4. any other matters as determined by the Director General.

42(2) [Timing for application]

An application for a customs ruling under subsection (1) may be made—

  1. at any time before any service is provided; or

  2. at any later time, if permitted by the Director General.

42(3) [Withdrawal of application]

An applicant may withdraw his application at any time before a customs ruling is made and any payment made relating to the application for the customs ruling shall be forfeited by the Director General.

Finance (No. 2) Bill 2023

The proposed amendment to Section 42 of the Service Tax Act 2018, as outlined in the Finance (No. 2) Bill 2023, introduces a notable change in the application process for customs rulings.

Section 42(1) initially allowed individuals to apply "in the prescribed form together with the prescribed fee" to the Director General for a customs ruling.

The amendment replaces this language, stating that individuals may now apply "to the Director General, in the form and manner as determined by the Director General together with the prescribed fee."

This amendment grants the Director General the authority to specify both the form and manner in which applications should be made.

Consequently, this amendment introduces a more flexible and adaptable approach to the application process, empowering the Director General to determine the most suitable format for receiving requests for customs rulings.

The impact of this change lies in streamlining and potentially modernising the application process, aligning it with contemporary practices and enhancing administrative efficiency in obtaining customs rulings.

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