THE PROCESS OF REPAYMENT OR CANCELLATION REQUEST

20 March 2023

FBK&PARTNERS

HOW DOES THE REPAYMENT OR CANCELLATION REQUEST PROCESS WORK?

The process of repayment or cancellation in cases overcalculated or overcharged customs duties is covered by Articles 211 and 217 of the Customs Law. Although it is an administrative remedy, the repayment and cancellation process is essentially a dispute resolution procedure that requires disputes to be resolved without resorting to the judiciary. Any customs duty repayment or cancellation is not within the scope of administrative appeal. Only the cases of overestimation or collection of customs duties, stamp duties and TRT banderol fees on import are within the scope of repayment and cancellation. The application for the repayment and cancellation request must be made within three years from the date of notification of the relevant duties to the taxpayers. Due to this nature, the customs duty, which is an administrative decision, is subject to the objection procedure under Article 242 of the Customs Law.

What is Repayment and Cancellation?

What is meant by repayment and cancellation is discussed within the scope of Article 210 of the Customs Law. For this reason, the literal interpretation of the law will be taken into consideration in the doctrine and application principles. Repayment, as can be understood from the meaning of the word, is the return of the overpaid tax debt, which has been notified to the taxpayer and overpaid tax debt, to the taxpayer by the administration related to the objection made. During the repayment appeal process, it will not be possible for taxpayers to repay the over-calculated but partially paid tax debts.

In case of cancellation of tax debt, it is essential that the relevant debt is notified to the taxpayers but not paid. It is the cancellation of the obligation to pay the debt partially or completely due to the provisions written in the Customs Law and related laws.

Relationship with Other Administrative Applications Under the Turkish Customs Law

The Customs Law, which is also an administrative procedure law, includes customs duties as a special subject and includes administrative appeal procedures explaining the disputes that may arise regarding customs duties. In addition to the application for the repayment and cancel of customs duties, Article 6 of the Customs Law explains the procedural procedures for applications for decisions and Article 242 explains the procedural procedures for appeals. The reconciliation application, which was introduced to the legislation in 2011 and is an administrative tool, is not a remedy related to the refund or cancellation objection applications, and therefore will not be explained within the scope of our subject.

Scope of Repayment and Cancellation

It is understood from Articles 210, 221 and 214 of the Customs Law that the repayment and cancellation are within the scope of the taxes that taxpayers are obliged to pay in imports and exports. In addition to these taxes, Import Value Added Tax, Import Special Consumption Tax and TRT Band, which is not a special consumption tax, are also within the scope of taxes that are / may be subject to repayment and cancellation application.

Repayment and Cancellation Procedure

The applications for repayment and cancellation, which were previously required by the Ministry to be submitted in writing to the relevant administration in person with the annex-78 application form, have been opened to electronic application only with the introduced regulations. In addition to filling out the application form, the procedure for the repayment and cancellation procedure is regulated in Articles 502 and following articles of the Customs Regulation. For the taxpayers who will make an application, it is important to regularly follow the Customs Law, Customs Regulation and electronic application system in terms of the application period, the examination of the application and the result of the application.

Repayment and cancellation applications are subject to certain periods of limitation, as in all administrative appeals. However, within the scope of the repayment and cancellation application; the duration of each tax debt is regulated separately within the framework of the type of tax. If the application is not made, it will not be possible to repay the tax subject to repayment or cancellation. Exceeding the right to apply in terms of time is regulated in Articles 211, 213 and 214 of the Customs Law as an exception. The exempted articles deal with force majeure and unexpected situations related to why the application cannot be made. In order to benefit from these exemptions, taxpayers must prove the force majeure or unexpected circumstances to the customs administration.

Review of the Application

In the case of an application for repayment or cancellation, the customs administration must conduct a comprehensive and qualified investigation. It will be sufficient to investigate all applications for repayment or cancellation made within the time limit, and in this case, the administrative process will proceed as a whole for both the administration and the applicant.

It would be a procedural error for the administration to issue different decisions on an application regardless of its legal basis. In the event that taxpayers make separate applications for the same tax debt for different legal reasons, a single decision should be issued. It is possible that a new case law may emerge, the law may change in a way to affect the old one in a favorable way, and these may not have been foreseen, evaluated or asserted by the administration in more than one application for repayment or cancellation of the same tax debt.

Partial or full rejection of the application made by the relevant customs administration will not prevent a new decision on the same subject during the application period. If there is a court decision on the subject, the Customs Administration will not be able to make a new decision and will have to implement the court decision. It should be taken into consideration that although no relevant conditions change during the application process, the fact that taxpayers make more than one application will be perceived as an abuse of right due to excessive stationery and unnecessary occupation of the administration, which may lead to a decision against the applicants in the application.

If the result of the application, which must be notified in writing by the relevant administration, is unfavorable to the applicant, the remedy of appeal under Article 6, Paragraph 3 of the Customs Law is open, subject to the condition that the appeal must be justified.

Since the decision against the applicant as a result of the examination of the application by the relevant customs administration was made within the scope of the Customs Law, administrative appeal procedures must be exhausted in order to apply for judicial remedy.

How to Apply?

With the new regulation, the repayment or cancellation can now only be done electronically. In the electronic booklet prepared by the Ministry to explain the new system to citizens, it is stated as follows: “The Repayment or Cancellation Request Management System is a system that allows the electronic submission of the “Repayment or Cancellation Application Form” and the documents that must be submitted in accordance with Article 502 of the Customs Regulation within the scope of the repayment and cancellation applications to be made in accordance with the provisions of Articles 211 to 214 of the Turkish Customs Law No. 4458, which must be submitted in accordance with Article 502 of the Customs Regulation and which are included in Annex 78 of the said Regulation. 01.04. 2020 dated 01.04. 2020 and published in the Resmi Gazete (Official Gazette or newspaper of Turkish Republic) dated 31086 numbered 30th article of the Regulation on the Amendment of the Customs Regulation published in the Official Gazette dated 01.04. 2020 and numbered 31086, the Repayment or Cancellation Application Form and the documents attached to the Form must be submitted electronically to the relevant Customs Directorate by following the steps specified below.”, “…The application is accessed from the eTransactions section on the web page of our Ministry with the BILGE System user code and password.”

CONCLUSION

Repayment and cancellation are an administrative remedy that serves to resolve disputes at the administrative stage within the framework of customs duties and fines. The evaluation of the application process based on the value added tax, TRT Bandrol fee and anti-dumping tax levied on imports, which are stated to be within the scope of repayment and cancellation, is made according to the characteristics of each economic obligation taken during imports.

THE PROCESS OF OBJECTION TO CUSTOMS DUTIES UNDER ARTICLE 242 OF THE TURKISH CUSTOMS LAW

13 March 2023

FBK&PARTNERS

THE PROCESS OF OBJECTION TO CUSTOMS DUTIES UNDER ARTICLE 242 OF THE TURKISH CUSTOMS LAW

Article 242 of the Customs Code regulates complaints and executive decisions related to customs and fines. The administrative appeal regulated under the Customs Law is a mandatory administrative remedy. When the provision of Article 242 and its secondary legislation are analyzed, it is understood that this practice is contrary to the basic principles of administrative law and fundamental rights and freedoms. This is because this remedy directly affects the taxpayer’s right of access to the jurisdiction. In addition, the taxpayer’s property rights can indirectly affects by the interests for late payment that may arise due to the prolongation of the administrative and legal process.

INTRODUCTION

Article 242 of the Turkish Customs Law regulates the appeal procedure for customs duties and fines. This regulation is considered as an administrative appeal that must be exhausted before the lawsuit. Therefore, the administrative objection process that stipulated in the Turkish Customs Law has affected the right to file a lawsuit of related persons. This is because failure to file the objection properly also prevents the filing of a lawsuit. For this reason, it is important to clearly state the duration and procedure of the administrative objection regulated by law.

LEGAL SCOPE OF ADMINISTRATIVE OBJECTION

The administrative objection procedure is regulated under Article 242 of the Turkish Customs Law. In the former regulation of the article, we see that a two-stage approach was used for correction and objection. However, since the practice did not yield the expected results, the aforementioned provision was amended, and the correction request practice was abandoned. According to Article 242, “Within 15 days from the notification, the debtors may appeal against the customs duties, fines and administrative decisions under a petition addressed to a superior authority or to the same authority if such a superior authority does not exist. Article 242/4 of the Turkish Customs Law stipulates that if the objection is rejected, the objection may be appealed to administrative jurisdiction. Although the provision in question is regulated as “may appeal”, the “Danistay” (the highest supervisory authority in the administrative judiciary) has established ruling cases that administrative appeal procedures must be exhausted before applying to the judiciary. According to this provision, taxpayers may file an administrative appeal against tax and penalty decisions. The fifteen-day period mentioned in the provision is legally guaranteed for the reconciliation request.

Pursuant to Article 242/2 of the Turkish Customs Law, an answer to the objection must be given within 30 days following the filing of the administrative objection. If the administration does not respond within 30 days, it is accepted that the application is tacitly rejected, and the judicial remedy is opened. However, Article 586 of the Customs Regulation; “The objections shall be notified to the relevant person by making a decision within thirty days by examining the declaration and all other documents subject to the dispute and the sample to be taken from the goods, the goods themselves in cases where it is not possible to take a sample or other documents that will give an idea without seeing the goods such as photographs, catalogs, prospectuses, or if necessary, by taking the opinion of the relevant customs administration. In cases where a decision cannot be taken within thirty days, the second paragraph of Article 6 of the Law shall apply.” In paragraph 2 of Article 6 of the Turkish Customs Law; “The request for a decision must be made in writing. Customs administrations take a decision within 30 days from the receipt of the application regarding the request. Decisions made are notified to the applicant in writing. However, that 30-day period may be exceeded where the customs administrations are unable to comply with it. In that case, those administrations shall so inform the applicant before the expiry of the above-mentioned period, stating the grounds which justify exceeding it and indicating the further period of time which they consider necessary in order to give a ruling on the request.” In the circular issued by the General Directorate of Customs in 2014 on responding to administrative appeals, the explanations on the determination of this additional period of time cited Article 10 of the Turkish Administrative Procedure Law as the provision on which the additional period of time would be based. Within the scope of these provisions, for disputes, the obliged parties must first exhaust the administrative appeal procedures.

The administrative appeal period is 15 days, and the relevant administration must respond to the acceptance or rejection of the objection within 30 days. However, if the administration determines that the examination will exceed the 30-day period, it must notify the applicant of the additional period deemed necessary before the end of the period and with justification. On the other hand, the period specified in the Turkish Administrative Procedure Law provision should not exceed 6 months from the application. In any case, even if the additional period is used, the applicants may apply to the judicial remedy according to paragraph 2 of Article 10 of the Turkish Administrative Procedure Law due to the lack of a final result within the 30-day period. If the answer given by the administration at the end of the additional period is in favor of the applicant, the administrative judiciary should conclude the case by issuing a decision of “no decision” since the lawsuit filed will not be subject to the case.

OBLIGATION OF THE ADMINISTRATIVE REMEDY

It is important to examine the compulsory administrative appeal as it may lead to loss of rights. This is because, if the administrative appeal is made mandatory, the administrative action may be subject to litigation only if there is an objection. At the same time, exceeding the mandatory administrative objection period will lead to loss of rights in terms of both objection and judicial remedy. Although it is regulated as a right in the relevant legislation, it is seen from the regulations of the Danistay that administrative objection is considered mandatory. The regulation on administrative objection in the Turkish Customs Law is one of them. Paragraph 1 of Article 242 of the Turkish Customs Law clearly stipulates that “an objection may be filed”. Despite this provision, it is understood from the case law of the Danistay and the circulars of the Ministry of Trade that the said provision is a mandatory administrative remedy. There is no explanation as to what the legislator meant by this provision. A literal interpretation of the provision is possible, but since the wording of the provision conflicts with the practices, there will not be a definitive interpretation of the provision.

EVALUATION IN TERMS OF RIGHT TO LEGAL REMEDIES

The necessity of exhausting the mandatory administrative objection before the judicial remedy, the possibility of losing the freedom to seek rights due to the complete closure of the judicial remedy in case of missing the deadline, and the fact that it is related to the property rights of the taxpayers should be clearly understood by the by interested parties. The administrative appeal procedure regulated in the Turkish Customs Law is not regulated in a single law and its application is also shaped by the Turkish Administrative Procedure Law, the communiqués of the Turkish Ministry of Trade and the case law of the Danistay.

The fact that the administrative objection, which is accepted to be mandatory, is regulated in a complex manner in the laws, which may cause individuals to suffer loss of rights, is contrary to Article 40/2 of the Constitution. The administrative objection procedure in the Turkish Customs Law creates a temporary obstacle in terms of taxpayers’ rights in terms of the freedom to seek rights, at the stage of going to the judiciary.

The regulation under Article 242 of the Turkish Customs Law is essentially uncomplicated. However, the fact that the regulation in the Customs Regulation refers to Article 6 of the Turkish Customs Law, the additional period provision in the article is not clear, and the additional period is based on Article 10 of the Turkish Administrative Procedure Law in the circular published by the General Directorate of Customs causes the administrative objection, which is the subject of this framework, to be procedurally complicated.

CONCLUSION

According to the literal interpretation of the legislator, the administrative appeal procedure under Article 242 of the Customs Code is an optional remedy. However, there are many contradictions when it comes to the elements of the administrative appeal procedure in the Turkish Customs Code. These contradictory statements lead to blocked access to courts and loss of property rights.