The Customs Department is continuously rationalising and modernising its procedures through the adoption of information technology and global best practices. Numerous measures are being taken to facilitate the customs clearance process and reduce transaction costs.
Key steps to facilitate customs procedures
The Indian Customs Electronic Data Interchange locations have been expanded from 53 in 2009 to 253 in 2021. This should lead to a massive replacement of manual processes by over 500 per cent. It would also help in accumulating data for policymaking. Dry ports or inland container depots have been expanded to decongest seaports and container freight stations (CFSs). Facilitation levels under the risk management system have been enhanced and now stand at 85-90 per cent. This should provide great relief to imports with charges.
The focus is continuously being shifted towards paperless and contactless customs. An integrated risk management facility for partner government agencies (PGAs) has been introduced, which will greatly expedite clearances. More than 55 PGAs are on board. PGAs are very important for clearance of cargo. A portal called e-Sanchit has been introduced for easy uploading of documents. Filing of bills of entry within a time limit has been made mandatory, with delays incurring fees. The authorised economic operator (AEO) programme and its tangible benefits (Tiers 1, 2 and 3) have been revised. Further, the process amending the general manifest for imports has been streamlined through seaports.
The purpose of digitalisation is to reduce the time taken for importing or exporting cargo while increasing transparency and lowering transaction costs. The focus has been on reducing dwell (import/export) cargo time, which is the total time taken from the point cargo makes entry till it gets discharged. We are working on reducing import time from 48 to 24 hours, and export time from 24 to 12 hours. 24×7 clearance has been facilitated at more than 19 seaports. The representatives of all stakeholders gather for frequent deliberations at the permanent trade facilitation committees and customs clearance facilitation committees. Capacity building and aggressive outreach strategies have been deployed to improve participation of trade.
Further, the payment of duties by certain AEO categories and authorised public undertakings has been deferred. The system of physical control and locking of public and private warehouses by the Customs Department is being dispensed with, and will be replaced with record-based controls. Moreover, machine-based automated clearance of goods is being introduced, as well the use of non-intrusive techniques and tools for cargo inspection and examination. In addition, compliance verification is being carried out at Turant Suvidha Kendras. Some new internet technology initiatives have also been introduced, such as simplified registration for importer-exporter code and auto debit of bonds, which promotes contactless customs.
Recent key changes in the Customs Act, 1962
- Sub section (3) of Section 46 of the Customs Act, 1962, has been amended so as to mandate the filing of bills of entry before the end of the day preceding the day (including holidays) of arrival of goods. These changes facilitate pre-arrival processing and assessment of bills of entry by mandating their advance filing, thus leading to a significant decrease in the customs clearance time.
- Subsection (2) of Section 47 has been amended to provide the manner of payment of duty and interest thereon in the case of self-assessed bills of entry or, as the case may be, assessed, reassessed or provisionally assessed bills of entry.
- Section 49 has been amended to extend the facility of storage to imported goods entered for warehousing before their removal.
- Section 124 has been amended by inserting a second proviso to provide for issuance of supplementary show-cause notices.
- Section 128A has been amended to allow the commissioner (appeals) to remand a matter to the original authorities in specified cases.
- Section 149 has been amended so as to introduce a second proviso to allow amendments to be done through the customs automated system, the Indian Customs Electronic Gateway (ICEGATE), on the basis of risk evaluation through appropriate selection criteria.
- A new section, 51B, has been added so as to provide for the creation of an electronic duty credit ledger in the customs system. It will enable duty credit in lieu of duty remission benefits in electronic form and usage, transfer, etc.
- Another new chapter, VAA (Section 28DA), has been introduced as an enabling provision for administering preferential tariff treatment under free trade agreements.
These are subject to further change as per the requirements of trade and import/export.
Key issues and suggestions
Connectivity issues, lack of adequate infrastructure for testing laboratories, and improper or inefficient coordination amongst government agencies and other stakeholders involved in the customs clearance process are some key challenges, as they delay the in clearing of import and export goods.
It is necessary to establish laboratories at all seaports so that exporters and importers do not have to travel far to obtain the required test reports. For CFSs, 24×7 evacuation needs to be enabled through the notification of time slots and by easing traffic restrictions on roads approaching the port. Safety and security remain big concerns for port operators as well as the government. To resolve connectivity issues, freight at ports/airports needs to be managed via dedicated midnight freight corridors. A standardised sampling solution needs to be implemented across all customs zones. Rail infrastructure needs to be enhanced by way of creating centralised rail yards at major seaports. Smart gates should be deployed at major ports to facilitate faster movement. Moreover, there is a need to undertake detailed gap analyses of infrastructure and resolve issues related to logistics at seaports. Special facilities and logistics support are necessary for clearance of liquid bulk cargo. In addition, the terminal operator system, the port community system, shipping lines and CFS operators need to be integrated electronically at all major ports.
Going forward, five mobile X-ray container scanners systems will be procured. These state-of-the-art systems will be deployed at Haldia, Chennai, the Jawaharlal Nehru Port Trust, Goa and Cochin. The technological developments being deployed include blockchain for a transparent, paperless and secure documentation system, and electronic cargo tracking systems to secure the movement of transhipment cargo and avoid theft/pilferage. Further, an online facility for scheduling examination of import cargo, with the aim of minimising the physical interface of customs and other stakeholders with trade, has been launched as a pilot project and will soon be extended to all locations.
Based on inputs from an interaction with S. Faheem Ahmed, Principal Commissioner, Central Goods and Services Tax, Visakhapatnam, at the 19th annual conference on “Ports in India”, organised by Indian Infrastructure