Budget 2025 Proposes New Time Limit for Refund Claims under Customs Act

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The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, proposes a key amendment to the Customs Act, 1962, clarifying the time limit for refund claims. A new explanation added to Section 27(1) establishes a one-year limitation period for refund claims arising from revised entries under Section 18A or amendments under Section 149 of the Act. This change aims to streamline customs refund procedures and provide greater clarity for importers and businesses.

This amendment brings much-needed clarity to the refund process. Previously, the time frame for such claims was ambiguous, potentially leading to delays and disputes. Now, businesses have a clear deadline of one year from the date of duty or interest payment to submit their refund applications. This is expected to improve compliance and reduce the number of pending claims.

The new one-year time limit is expected to enhance the efficiency of customs processes. By establishing a strict window for refund claims, customs authorities can process applications more effectively and minimize delays. This change benefits both businesses, who can receive refunds promptly, and the government, which can manage customs procedures more efficiently.

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