What is provisional assessment of Bill of Entries and procedure for Finalisation?

With the rapid pace of international business, importers can be put into a situation wherein there is uncertainty regarding the classification of the goods, value, or duty payable at the time the Bill of Entry is filed. For the settlement of such cases, the provisional Bill of Entry assessment is a valuable service of the Customs Department. The practice is such that imports can be cleared immediately through provisional clearance, and importers and Customs personnel both get a sufficient time to affirm the provisional customs assessments to arrive at the correct duties and compliances as part of the process of finalizing provisional assessment.

Understanding Provisional Assessment of Bill of Entries

Provisional assessment of Bill is a facility of the Customs Act whereby importers can receive the clearance of imports even when some details regarding the imported items—classification, valuation, or duty payable—are yet to be determined. It is indeed a preliminary assessment with the purpose of further verification or determination.

The distinguishing features of provisional assessment of Bill of Entry are:

1. Provisional Nature: The valuation is provisional in nature, in the sense that last duty liability is determined later after verification.

2. Temporary Clearance: Importers are able to obtain temporary clearance of goods, saving port time and ensuring smooth business transactions.

3. Security Requirement (PD Bond): Importers are required to furnish a security in the form of a PD Bond to pay for potential duty and tax liabilities until finality.

4. Compliance with Regulations: Although the assessment is temporary, the remaining Customs law compliance necessities like submission of the Bill of Entry and compliance with bans on imports are still obligatory.

The central function of this facility is to find a balance between ease of trade facilitation and accurate collection of duties.

When is Provisional Customs Assessment Applicable?

Provisional customs assessments are typically used when:

• The proper classification of goods being imported is ambiguous.
• There is controversy regarding valuation.
• The goods should be inspected or technically examined prior to final determination of duty.
• The importers should be given early clearance on account of compulsions of business but final determination cannot be carried out at once.

By provisional assessment, Customs prevents the importers from being unduly held up while protecting the revenue.

Procedure for Provisional Assessment of Bill of Entries

Procedure for making a provisional assessment of Bill consists of fewer salient steps:

1. Filing of the Bill of Entry

The importer is required to file a Bill of Entry with the Customs Department stating that a provisional assessment is being sought. Everything related to description of goods, quantity, and declared value is to be stated.

2. Request for Provisional Assessment

The importer makes a formal application for provisional customs valuations under Section 18 of the Customs Act. The application should give a good explanation of why the provisional assessment is sought and should give any technical information, valuation problems, or classification doubt.

3. Security Deposit (PD Bond)

To pay duty, the importer has to provide a PD Bond. The bond is a promise that the final duties, taxes, and penalties (if any) will be paid when the assessment becomes final. The Customs authorities fix the quantum of security, normally on the basis of provisional duty calculation.

4. Provisional Clearance of Goods

On receipt of the request and PD Bond, Customs may grant provisional clearance of the goods. The implication is that goods may be cleared physically from the port or bonded warehouse pending provisional assessment.

5. Examination and Testing (If Required)

In instances where valuation or classification is based on technical confirmation, examination or testing of merchandise may be done by Customs. Outputs of this exercise are crucial to the finalization process for provisional assessment.

6. Finalization of Provisional Assessment

After all verifications and clarifications are done, Customs goes ahead to finalize provisional assessment. Final calculation of duty is given to the importer, and alterations in paid duties or underpaid under the PD Bond are reconciled.

Finalization Process for Provisional Assessment

Finalization process for provisional assessment must be done to ensure that all dues are correctly calculated.

The process generally follows these steps:

1. Submission of Required Information

Other documents, certificates, test reports, or invoices as Customs may deem necessary for proper assessment are to be presented by the importers.

2. Customs Review

Customs officers examine all the documents submitted and cross-check them against the original provisional assessment.

3. Duty Adjustment

If the final assessment calculates a higher duty than provisionally paid, the importer needs to pay the difference. If lower duty is due, Customs refunds the amount overpaid.

4. Release of PD Bond

When all the adjustments have been made and the duties balanced, PD Bond is issued, which brings the provisional assessment process to an end.

5. Issue of Final Assessment Order

A formal final assessment order is issued by Customs for the payable duty and other charges as may be due. This is equivalent to formal termination of provisional assessment.

Advantages of Provisional Assessment of Bill of Entry

The ease of provisional customs assessments has a number of benefits:

• Early Clearance: Importers are given provisional clearance of goods without having to wait for final evaluation.
• Flexibility: It allows technical or valuation uncertainty, and importers have time to provide correct information.
• Guarantee of Revenue: Customs is paid duty in advance via PD Bond and is assured revenue protection.
• Less Storage Cost: Pre-clearance avoids long port storage and demurrage charges.

 

Recent CBIC Circular on Provisional Assessment (September 2025)

The Central Board of Indirect Taxes and Customs (CBIC) has notified Circular No. 22/2025-Customs dated 12th September 2025, and the Customs (Provisional Assessment) Regulations, 2025, to simplify the process of provisional assessments. Under this new regime, Finalization of Provisional Assessment has to be done within a period of two years from the day of provisional assessment, and the time may be extended by the Principal Commissioner or Commissioner of Customs on reasonable grounds. For clearance in time, pending test reports, queries, and documents have to be finalized within 14 months so that the Proper Officer can conclude cases within the statutory time. These measures will apply to new and outstanding cases on or after 29th March 2025 and supersede the previous 2018 Regulations and introduce more clarity and accountability to the provisional clearance process.

Problems in Provisional Assessment

Although provisional assessment is extremely beneficial, it will have a couple of problems if not tackled properly:

• Complex Documentation: Finalization hinges on submitting proper and complete documents.
• PD Bond Requirements: PD Bond requirements need to be monitored until final review is finalized.
• Future Penalties: Errors on provisional declaration can lead to penalties at finalization.
• Taking Time for Closing: Technical examination or difference in classification might lead to delays in closing time.

 

How SKMC Global Can Assist?

SKMC Global is an expert in handling complete support for importers and exporters. In case of businesses handling provisional customs assessment, SKMC Global provides the following:

1. Expert Consultation

Our professionals advise importers on how to avail themselves of provisional assessment of Bill and submit correct documentation to Customs.

2. PD Bond Handling

We help in preparing, submitting, and handling the PD Bond for hassle-free provisional clearance and compliance.

3. Document Preparation

SKMC Global ensures all the supporting documents to be finalized correctly and submitted within time to prevent any delays.

4. Finalization Support

We arrange meetings with Customs officials to finalize provisional assessment process in order to enable proper duty payment and bond release.

5. Technical Advisory and Support

Our experts offer advice on compliance, valuation, and classification issues to avoid finalization disputes.

With the help of SKMC Global's expert services, importers can simplify the provisional customs valuation procedure, stay away from penalties, and save money and time.

Conclusion

Provisional assessment of Bill is a critical mechanism that facilitates earlier release of products and protecting appropriate collection of duties. Importers receive technical or valuation uncertainty flexibilities in the management of them through provisional customs assessments. Customs releases duties and settles the PD Bond through finalization of provisional assessment, protecting regulation compliance and revenue guarantee.

For importers wishing to simplify this process, SKMC Global offers end-to-end services, beginning with Bills of Entry finalization and filing and bond management. Specialist advice avoids delays, penalties, and high costs, simplifying international trade and making it more effective.

Through knowledge and efficient management of provisional assessments, importers may guarantee uninterrupted supply chains while being in full compliance with Customs regulations.