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Alerts:

Indirect Tax Alert - Customs: Auto-Renewal of AEO-T1 validity for continuous certification based on continuous compliance monitoring

02 August 2021

Auto-Renewal of AEO-T1 validity for continuous certification based on continuous compliance monitoring

  • As prescribed in the previous circulars the validity of AEO certificate shall be three years for AEO-T1 and an AEO-T1 entity wishing to continue their AEO status must submit an application for renewal, 30 days in advance of the expiry of the validity of the certification. Further, the status of the AEO-T1 entities would be reviewed every three years;
  • Taking into account the reported difficulties faced by the AEO-T1 (including MSME AEO-T1) entities in seeking renewal and with a view to reduce their compliance burden, CBIC has decided to allow the facility of continuous AEO certification/auto renewal for AEO-T1 entities. Thus, these entities would no longer be required to seek periodic renewal of their AEO-T1 certification;
  • The facility of continuous AEO certification/auto renewal for AEO-T1 entities is being made available subject to submission of annual self-declaration in prescribed format and review thereof. Such annual self-declaration is to be filed between on 1 October to 31 December each year. All AEO-T1 entities certified on or after 01 April 2019 shall stand migrated to the auto renewal process with effect from 01 August 2021;
  • The zonal AEO programme manager that had approved the AEO-T1 certification shall take the annual self-declaration, as mentioned above, on record. However, in cases where any change in AEO-T1 compliance as per self-declaration is noticed or any adverse input is received from any field formation/investigation agency, the zonal AEO programme manager shall take suitable action in terms of Circular no:33/2016-Customs dated 22 July 2016, as amended, under intimation (electronically) to such AEO-T1 entity as well as to the national AEO Programme Manager, Directorate of International Customs;
  • On the basis of the annual self-declaration, the concerned zone shall initiate a comprehensive compliance review for the AEO-T1 entities (including MSME AEO-T1), as amended, which is outlined as under:
    • The review shall be conducted on the basis of at least two annual self-declarations filed after issuance of AEO T1 certificate or from the date of last auto renewal of certification on account of successful review, whichever is later;
    • The review process has to be completed before the commencement of the due date for submission of the 3rd annual self-declaration (i.e. before 31st October) from the date of certification or from the date of last auto renewal of certification on account of successful review, whichever is later;
    • During the review process, the Zonal AEO Programme Manager may seek additional documents/information, if required for completion of the review process.
  • As the review process would rely on the two annual declarations bringing out the details for the last two financial years, for the AEO-T1 entities certified between 01 April 2019 and 31 December 2019, the AEO-T1 (including MSME AEO-T1) entity would be required to submit the details of the previous two financial years as their first annual self-declaration for the current year i.e., between 01 October 2021 and 31 December 2021;
  • Similarly, the AEO- T1 entities (including MSME AEO-T1) certified between 01 January 2020 to 31 December 2020 would be required to submit the details of the previous two financial years as their first annual self-declaration for the next year i.e., between 01 October 2022 and 31 December 2022. Such annual declarations would be scrutinised by the zone concerned within 60 days i.e., by the end of February 2022 and February 2023 respectively. All other AEO-T1 (including MSME AEO-T1) entities would be required to submit one annual self-declaration for the previous financial year only, each year;
  • Based on the comprehensive compliance review exercise done, the concerned zone shall approve or revoke, as the case may be, continuous certification of the AEO-T1 entity and inform the National AEO Programme Manager, Directorate of International Customs. Only in case of adverse findings, the entity would be informed, for taking action. Once revoked, a new AEO-T1 (including MSME AEO-T1) certification would only be granted through fresh filing of application for AEO certification;
  • The annual self-declaration for the AEO auto renewal process will be submitted by the applicant through the AEO online web portal . The necessary implementation to this effect is being carried-out on the AEO web portal;
  • The AEO entities certified between 1st  January to 31st  December each year shall be exempted from filing the annual declaration for that year. Accordingly, AEO-T1 entities certified on or after 01 January 2021 for the present year will not be required to submit annual self-declaration for the present year.

[Circular no:18/2021-Customs dated 31 July 2021]