Getting Easier: Gamut of customs reform measures introduced

Gamut of customs reform measures introduced

India has witnessed a significant jump in its ranking in the World Bank’s Ease of Doing Business Index under the “Trading Across Borders” parameter in the past two years. India has jumped 78 ranks in two years, from 146 in 2017 to 80 in 2018 and then to 68 in the 2019 ranking. This has been made possible on account of various customs facilitation measures taken by the Central Board of Excise and Customs (CBEC) to promote ease of doing business.

Another indicator to measure the positive impact of customs reforms is the annual time release study done for Nhava Sheva port. The study is primarily an instrument for assessing the impact of reforms on release time, gauging the efficiency of the transmission mechanism of reforms and identifying bottlenecks. The all-in-one average release time for imports has improved from 181.34 hours in 2017 to 144.18 hours in 2018 and to 105.41 hours in 2019.

Overall several customs facilitation measures have been taken by the CBEC along with support from other agencies.

The board has introduced a single-window system to bring on to one platform six partner government agencies (PGAs) for providing a single documentation facility as well as a common risk management system. Plans are already on the roll for enlisting another 46 PGAs.

The time of submission of bills of entry plays a crucial role in the reduction of average release time. As a result of the nudge, the share of advance bills of entry has increased from around 15 per cent in 2016 to 66.2 per cent in 2019. In addition, early filing of advance bills of entry has enabled higher degree of pre-arrival processing and thereby lower release time.

With regard to manifest filing by shipping lines, the advanced filing facility is available. Recently, the CBEC has come out with revised manifest regulations for sea cargo that envisage capturing quite a lot of information when the cargo leaves the load port in a foreign country. The availability of this information with the CBEC is of great use to them in assessing risk parameters and in saving time and costs overall.

The CBEC is also trying to differentiate between compliant and non-compliant trade. A risk management system that is almost 15 years old is available, but is being continuously tweaked to make it better, sharper and more focused on non-compliant traders.

The authorised economic operator (AEO) programme has around 4,500 members currently across the country. It is a three-tier programme that offers substantial benefits to trade, particularly tier 2 and tier 3 where operators are entitled to deferred payment duties as well.

Meanwhile, an electronic messaging system between the shipping lines and custodians for electronic delivery orders, instead of paper-based delivery orders, has been introduced.

Another important reform has been the introduction and stabilisation of the e-Sanchit facility, which provides for online uploading of the supporting documents.

In 2019, a new IT initiative named ICEDASH was launched. ICEDASH is an ease of doing business monitoring dashboard of the Indian customs helping the public see the daily customs clearance times of import cargo at various ports and airports. The dashboard can be accessed through the CBEC website.

On February 6, 2020, the CBEC introduced machine-based automated clearance of imported goods. Under this, the customs officer will be able to undertake all compliance verification such as examination of goods even before duties are paid, and once the importer pays the duty, the customs system will automatically give the clearance or “out of charge” to the imported goods. The new initiative has been launched as a pilot at two ports, Chennai and Nhava Sheva.

Some other measures are also becoming stronger and gaining wider acceptance. Considerable growth both in the number of AEO status holders as well as direct port delivery (DPD)/ direct port entry  beneficiaries; increase in the percentage of twenty-foot equivalent units cleared under DPD to 57 per cent (as of December 2019, excluding empties and containers meant for transshipment); better targeting of risky consignments/entities,  especially for interdiction by PGAs; electronic sealing of export containers and installation of state-of-the-art drive-through scanners are a few examples.

The implementation of reforms has not been free of challenges. There is aversion in the trade community to subscribe to customs facilitation programmes such as AEO. The launch of new programmes has to be followed by outreach to and training of customs brokers, officers as well as the trade community.

Based on remarks by Vivek Johri, Principal Chief Commissioner, Customs, Jawaharlal Nehru Custom House, at a recent India Infrastructure conference