A lot of structural change has already been undertaken by the Indian Customs in the recent past. Pranab Kumar Das, IRS, Special Secretary & Member (Customs) CBEC, appraised the delegates on what the industry should look forward to from the department.
The second session of the conclave was focused on the role of Customs in EXIM trade, and the topic was Transformation of Customs and Trade Facilitation. Pranab Kumar Das, IRS, Special Secretary & Member (Customs) Central Board of Excise and Customs, Ministry of Finance, Govt. of India, in rendezvous with Umesh Grover, Secretary General, CFS Association of India, shared a deep insight on the evolution of Customs over a period of time. In the introductory remark, Umesh Grover underlined the fact that Customs has evolved in its role from being a regulator to a facilitator. He added that the changes undertaken by the Customs in the last couple of years has been very encouraging for the industry. Unlike earlier days, now about 90 per cent of passengers coming from abroad get a hassle free passage through the Customs at the airport, and 55 per cent of cargo is cleared through risk management system. Touching upon various structural reforms, Pranab Kumar Das said that government is putting lot of stress on logistics in a bid to facilitate trade growth. With the emphasis on Ease of Doing Business, Customs is also doing its bit to achieve the goal. He added that special arrangements have been done for even non-EDI locations to speed up Customs clearing. Moreover, Single Window Interface for Facilitating Trade (SWIFT), has been implemented where regulators pertaining to various departments and ministries submit their risk parameters and factoring in all the parameters, creation of a single document has been initiated. Currently, there are six participating government agencies that have been taken on board for creation of the platform, but gradually the number will grow to 30 various departments. Das reinstated that following India becoming a signatory to the TFA, the department has taken up reforms for the ease of doing trade. The Special Secretary & Member (Customs), reiterated the need for the industry stake holders, especially the exporters and importers to appreciate the reforms and avail various benefits on offer such as AEO program. He emphasized that though the Union government is putting lot of effort to motivate importers and exporters to register for AEO, but the number of participation is not very encouraging. Traders are eligible for three types of AEO program, and those who have already implemented the requisite mechanism and safeguard measures are eligible for Type II AEO program and can avail the benefit of deferred duty payment, exemption of bonds and bank guarantee and exemption of goods scanning at the time of clearance, among others. AEOs with proven track record in India can also avail the benefits in the partner countries as well which will help to reduce transaction cost and time. The other thrust area for the government is to widen the acceptability of DPD by the trade, and e-Seals have been introduced which eliminates the need for physical verification by statutory bodies. Similarly, for direct port entry RFID based cargo tracking system has been introduced. Customs is working towards making the sector more progressive and future looking, and the department has been pro-active on industry interaction. Commending the Customs department for the trade facilitation initiatives, Umesh Grover remarked that they will for sure help growth of exim trade and make India more competitive at global level.
Economic Development Board, Andhra Pradesh
Discussing more on the AEO and ACP programmes, Umesh Grover said while their acceptance is gradually increasing, but there is still a certain section of importers who are shying away from getting AEO or ACP certification. What is holding back the trade community and how will the Customs approach this section of traders? Pranab Kumar Das reiterated that as more and more stakeholders embrace AEO and other initiatives, there will be very little scope for any government official to create hindrance. Risk based automatic assessment system will eliminate human intervention helping EXIM trade to move fast. He cautioned stakeholders and service providers on the need to accept the change and realign business as per the changing business environment else it will be difficult to sustain in the long run. Touching upon various infrastructure bottlenecks at ports and terminals such as limited number of drive through scanner, Das said that more number of scanners will be installed to address these issues. Recently, various service providers have been asked to be Customs Cargo Services Provider (CCSP) as a result these operators will come under the ambit of department regulation. Some industry leaders raised concerns over the investment that has gone into CFS and ICD with a time horizon of about 15-20 years, however the issuance of restricted license for a limited period of time puts the investment at risk. On which Das said that the logistics service provider could overcome it by registering for AEO Logistics Operators (AEOLO) and build the system inline with the stator norms following which the Customs department can issue license for longer duration.
Clarifying the issues raised by some delegates regarding the slowdown of IceGate system, Das said that the government has sanctioned about `3,000 crore for development of a new IT platform under the project named as Saksham, which should address the concerns. Anil Devli, CEO, Indian National Shipowners’ Association highlighted the matter related to Bangladesh Customs not facilitating entry of coastal sea cargo from India to Chittagong, to move via road onwards to the north eastern states of India. Special Secretary & Member (Customs) advised to raise the issue before the Commerce Secretary, GoI. Devli also insisted to look into a pending notification related to the Customs which could allow Indian flag vessels to carry both domestic and EXIM cargo on board, and Special Secretary & Member (Customs) assured to address the matter.
Vinita Venkatesh, Director, Krishnapatnam Port Container Terminal & MD, Ocean2Door, put forward the issue of varying opinions by different Commissionerates on import of certain goods such as solar panels where Customs on the east coast is asking for bank guarantee whereas Customs at Nhava Sheva has no such demand. Upon which Pranab Kumar Das said that the matter is under the purview of ministry of power and ministry of finance, and he will not be able to comment further. There is difference of application and classification, due to which the issues are slightly perplexed than what it looks like. There are two conflicting classifications that has come to the notice of the department as a result one classification product is attracting duty while other is duty free. He assured that shortly a decision will be taken to resolve the matter.
Dhruv Kotak, Joint MD, J M Baxi Group sharing his thoughts on the facility for AEOs to avail seamless cargo movement from a partner country into India, there is a need for creation of common documentation or template among partner countries to streamline customs procedure. On which Special Secretary & Member (Customs) said that the government has already started work on it and now very minimal documents are needed for movement of AEO goods among TFA member countries. In a bid to eliminate intermediaries in the supply chain, Pranab Kumar Das added that a regulation will soon be introduced to bring all the stake holders under the scanner. He also warned that strict action will be taken against CHAs and steamer agents who are not making their tariff public on their website. He called that it is time for the industry for self regulation in the interest of the sector.
The second session was followed by a presentation by Andhra Pradesh Economics Development Board on “Logistics Investment Opportunities in Sunrise State Andhra Pradesh” highlighting various initiatives taken up by the newly formed state government to attract investment in logistics, warehousing and allied services sector in the state.
