Indirect Tax Laws and Practice · Remission of Duties

Remission of Customs Duty: Procedure and Conditions

Updated 11 October 2026 · Fact-checked

Remission means the customs officer gives up duty on imported goods that were lost, destroyed, pilfered or damaged before clearance. You must show the loss to the officer's satisfaction. Duty is waived fully for loss or destruction, and cut in proportion to value for damage. Pilferage is handled under Section 13.

Understand Procedure, Conditions and Case Law on Remission

Customs duty is payable on goods you import. But goods can be lost, destroyed, stolen or damaged before you clear them for home consumption. It would be unfair to charge full duty on goods you never received or that are now worth much less. The Act therefore gives relief by remission or abatement.

Three sections matter here. Section 22 covers damaged or deteriorated goods: duty is reduced in proportion to the fall in value. Section 23 covers goods lost or destroyed before clearance for home consumption: duty is remitted. Section 13 covers pilfered goods: the importer is not liable for duty on them.

Every claim rests on one idea: the officer must be satisfied on the facts. The burden of showing the loss, damage or destruction is on you. Timing also matters. Relief is available only in the window before clearance for home consumption (or, for Section 13, before the order for clearance or warehouse deposit).

Fault matters too. For damage after unloading, the accident must not be due to the wilful act, negligence or default of the importer, employee or agent. Damage before or during unloading has no such fault condition in the text. Loss by pilferage is carved out of Section 23 because Section 13 deals with it.

A related option is relinquishing title to the goods under Section 23(2). If you abandon the goods before clearance, you do not pay duty. But you cannot do this where an offence appears to have been committed.

Key rules to remember

Abatement on damaged goods (Section 22(2)): Duty payable = Duty on undamaged goods × (Value of damaged goods ÷ Value before damage); Duty bears the same proportion to original duty as damaged value bears to original value.
Section 22 conditions: (a) damage before or during unloading; (b) non-warehoused goods damaged after unloading but before examination under section 17, by accident without wilful act, negligence or default; (c) warehoused goods damaged before home clearance, same fault condition; The officer must be satisfied. Officer is Assistant or Deputy Commissioner of Customs.
Value of damaged goods (Section 22(3)): At the owner's option: (a) valued by the proper officer, or (b) sold by public auction, tender or, with consent, otherwise; gross sale proceeds are deemed the value; The choice belongs to the owner, not the officer. Gross proceeds, not net.
Lost or destroyed goods (Section 23(1)): Lost (not by pilferage) or destroyed before clearance for home consumption → duty remitted; Subject to Section 13 and to satisfaction of the officer.
Pilferage (Section 13): Pilfered after unloading and before order for clearance or warehouse deposit → no duty, unless goods are restored to the importer; If the pilfered goods are later restored to you, duty is payable on them.
Relinquishment (Section 23(2)): Owner may relinquish title before order under section 47 or section 60 → no duty; Not allowed where an offence appears to have been committed.

How to solve Procedure, Conditions and Case Law on Remission questions

Use this order for any remission question. It keeps you from mixing up the three sections.

1Identify what happened: damage, deterioration, loss, destruction, pilferage or abandonment.
2Fix the timing: was it before or during unloading, after unloading, or after clearance? Relief is only before clearance for home consumption.
3Pick the section: Section 22 for damage, Section 23(1) for loss or destruction, Section 13 for pilferage, Section 23(2) for relinquishment.
4Test the conditions: officer's satisfaction, no wilful act, negligence or default (where required), warehoused or non-warehoused status, and no offence for relinquishment.
5Compute the duty: for damage, find damaged value by officer's valuation or auction as the owner chooses, then apply the proportion. For loss or destruction, duty is nil.
6State the conclusion clearly with the section number and the amount of duty payable.

Quickest way: Section-matching shortcut

When to use it: Use in MCQs and short case questions where you must name the right section or find duty payable fast.

Match the keyword: damaged → 22, lost or destroyed → 23(1), pilfered → 13, abandon → 23(2).
Check the fault condition: only damage after unloading (22(1)(b) and (c)) needs the accident to be free of wilful act, negligence or default; damage before or during unloading has no such condition.
Compute ratio = damaged value ÷ original value, then multiply by original duty.
If auction is used, take gross sale proceeds as the damaged value.

Common mistakes in Procedure, Conditions and Case Law on Remission

Applying Section 23 to pilfered goods.
Pilferage looks like loss.
Fix: Section 23(1) excludes loss by pilferage. Pilferage goes to Section 13.
Deducting auction expenses before taking value of damaged goods.
Students think of net realisation.
Fix: Section 22(3)(b) deems the gross sale proceeds as the value.
Allowing relief for damage after clearance.
Students ignore the timing limit.
Fix: Relief is only before examination under section 17 (non-warehoused) or before clearance for home consumption (warehoused).
Saying the officer chooses how value is ascertained.
Assuming the department controls valuation.
Fix: Section 22(3) gives the option to the owner.
Ignoring that restored pilfered goods attract duty.
Only the main rule is remembered.
Fix: Section 13 has an exception: if goods are restored to the importer, duty is payable.
Allowing relinquishment of goods involved in an offence.
Students forget the proviso.
Fix: The proviso to Section 23(2) bars relinquishment where an offence appears to have been committed.

Worked examples

Example 1

Goods imported by Sharma Traders Ltd had duty of ₹2,00,000 if undamaged. A fire accident, not due to the importer's negligence, damaged them after unloading but before examination under section 17. Their value was ₹10,00,000 before damage. The owner chose auction, and gross sale proceeds were ₹6,00,000. Find the duty payable.

Show the solution

The goods are non-warehoused and damaged after unloading, before examination, by an accident without negligence. Section 22(1)(b) applies.
The owner opted for auction, so the gross proceeds of ₹6,00,000 are deemed the value of the damaged goods.
Ratio = 6,00,000 ÷ 10,00,000 = 0.6.
Duty = ₹2,00,000 × 0.6 = ₹1,20,000.

Answer: Duty payable is ₹1,20,000 under Section 22(2).

Example 2

An importer, Mehta Exports, finds that part of its consignment was stolen from the port area after unloading and before the order for clearance for home consumption. Another part was destroyed in a fire before clearance. Is duty payable on each part? Would your answer change if the stolen part is recovered and given back to Mehta?

Show the solution

The stolen part is pilfered after unloading and before the clearance order. Section 13 applies, so Mehta is not liable for duty on it.
The destroyed part was destroyed before clearance for home consumption. Under Section 23(1), if the officer is satisfied, duty is remitted.
If the stolen part is restored to Mehta, the exception in Section 13 applies and duty is leviable on those goods.
The destroyed part is unaffected.

Answer: No duty on the pilfered part (Section 13) or the destroyed part (Section 23(1)), subject to the officer's satisfaction. If the pilfered goods are restored to the importer, duty is payable on them.

Exam tips

Write the section number with every conclusion. Examiners reward correct citation.
In calculations, show the ratio step. Marks are often given for the method even if the arithmetic slips.
Check the facts for words like negligence, wilful or offence. They decide whether relief is available.
Do not confuse remission (Sections 13, 22, 23) with refund or drawback. Name the right relief.
Watch for pilferage versus other loss in MCQs. This is a favourite trap.

Practice questions from Remission of Duties

Procedure, Conditions and Case Law on Remission: frequently asked questions

How do I claim remission of duty on damaged goods?

You must show the officer, to his satisfaction, that the goods were damaged or deteriorated under the conditions of Section 22. Duty is then charged in proportion to the value of the damaged goods compared with their value before damage.

Is duty payable on pilfered goods?

No, if the goods are pilfered after unloading and before the order for clearance for home consumption or warehouse deposit. The exception is where the goods are restored to the importer, in which case duty is payable.

Who decides how damaged goods are valued?

The owner. Under Section 22(3) the owner may choose valuation by the proper officer or sale by auction, tender or another agreed manner, with the gross proceeds treated as value.

Can I abandon goods to avoid duty?

Yes, before the order for clearance under section 47 or warehouse deposit under section 60, you may relinquish title and not pay duty. You cannot do so where an offence appears to have been committed.