21 Jan 2014

Reforms and Measures Undertaken by Central Board of Excise and Customs to Facilitate Trade

Central Board of Excise and Customs (CBEC)
Central Board of Excise and Customs (CBEC) has been an early starter in introducing reforms and substantial reforms have already been carried out in the Central Excise laws and procedures since 1994.  The object of these reforms was to repose a greater trust in the tax-payers and bring about a substantial improvement in the delivery system and compliance through automation and trade facilitation measures. CBEC has also undertaken a number of e-governance initiatives with the objective of improving tax-payer services, transparency, accountability and efficiency in the indirect tax administration in India. 

These applications have automated all major processes in Customs, Central Excise and Service Tax through web-based and workflow-based systems, reducing the physical interface between the tax payers and the departmental officers, thereby reducing discretion and opportunity for corrupt practices.

Details of the important trade facilitation measures undertaken by CBEC are as below:

  Customs has initiated meaningful and effective trade facilitation that reduces transaction costs through the following measures for tax payers:
Automation in Customs
       CBEC had modified the Indian Customs EDI System (ICES) in 2009, which has been launched in 109 Customs locations in the country. The Indian Customs EDI Gateway(ICEGATE), the gateway portal hosts a number of services for the EDI partners and provides facilities for e-filing of documents from anywhere at any time (24/7). ICEGATE and ICES 1.5 are serving about 6.7 lakhs importers/ exporters and handling nearly 98% of India’s International trade.

CBEC is among the first departments that has adopted Information Technology Infrastructure Library (ITIL) framework to provide IT services to end users in a consistent manner. The following taxpayer services have been provided to the importers and exporters:

·               E-filing of Bills of Entry, Shipping Bills, IGM/EGM with electronic acknowledgements
·               An Accredited Clients Programme (ACP) whereby trusted importers are extended the facility of fast track custom clearance.
·               Connectivity with 17 types of Stakeholders such Custodian, Port Authorities, Shipping Lines. Airlines, Custom Brokers, DGFT, Banks and other Government Agencies, through electronic messages. This eliminates the need for paper movement across agencies and across locations.
·               Facility of electronic payment of duties
·               Selective appraisement and examination through the Risk Management System
·               Facility of filing of Bills of Entry and Shipping Bills through Service Centers 
·                Documents processed on a First-Come- First-served basis and status can be tracked.
·               Drawback is directly credited to exporters’ bank accounts.
·               Electronic Refund of Service Tax paid on exports
·               Uniform applicability of duty rates and trade policy across the country
·               Centralized Bond Management and elimination of Release Advices has enabled traders to file bond at any location and effect clearance from any other location.
·               Electronic transmission of Shipping Bills to DGFT and online receipt of licences has reduced physical interface with the departments and has also reduced time and cost of transaction
·               Round the clock Helpdesk with toll-free number
·               Automated Recording and Targeting System (ARTS) provides protection of Intellectual Property Rights (IPR)
Self Assessment
 Self Assessment of Customs duty by importers or exporters was introduced vide Finance Act, 2011.  This is paradigm shift away from assessment by Departmental officers to a trust based system of self- assessment.  The objective is to expedite release of imported / export goods. The interest of revenue in terms of ensuring correct declarations and duty payment is ensured by an electronic Risk Management System (RMS) that identifies risky consignments for assessment or examination or both. The shift to Self Assessment is aimed at increasing the facilitation level of consignments imported through Air, Sea and Inland Container Depots (ICDs) from the present 60%, 50% and 40% to 80%, 70% and 60%, respectively.

On Site Post Clearance Audit (OSPCA) Scheme
In accordance with the legal provisions introduced vide the Finance Act, 2011; a scheme of ‘On Site Post Clearance Audit’ (OSPCA) has been implemented w.e.f.1.10.2011 in case of the importers registered under the Customs Accredited Client Programme (ACP). This scheme is aimed at facilitating Customs clearance of goods and reducing dwell time.  At the same time, interest of revenue is safeguarded by a comprehensive verification of records and documents at the premises of the importer / exporter on annual basis.  Other categories of importers/ exporters shall be considered for inclusion later. 

Authorized Economic Operator Programme 
  Indian Customs Authorized Economic Operator (AEO) Programme has been developed pursuant to World Customs Organization adoption of SAFE Framework of Standards.  The programme aims to provide businesses in international supply chain with an internationally recognized quality work highlighting a business role in a secured supply chain and compliance to laws.  The full fledged Indian AEO programme was rolled out by the CBEC with issue of the Circular No. 28/2012-Customs, dated 16.11.2012.   Currently 16 applications are being processed at AEO centers at Regional Units as well as at headquarters. For wide publicity of AEO programme, pamphlet, poster and advertisement have been approved by the Board and these materials have been circulated among the field formations and local newspapers through DPPR.  Trade sensitization programmes in zones is currently underway.

24X7 Customs Clearance
·         In order to facilitate importers and exporters, CBEC began 24X7 Customs clearance with effect from September 1st, 2012 at identified Air Cargo Complexes, viz., Bangalore, Chennai, Delhi and Mumbai; and sea ports viz. Nhava Sheva, Kandla, Chennai and Kolkata in respect of certain categories of imports and exports. This facility has now been extended and presently covers 17 Air Cargo Complexes and 4 Sea Ports.

·         Clearance of indigenously manufactured goods has been allowed to Duty Free Shops located in the arrival and departure halls of the international airports. The permissible allowance including the restrictions and prohibitions, if any applicable to passengers and members of crew for purchase of the indigenous goods is governed by the same Baggage Rules that govern the imported goods.

·         Risk Management System (RMS) has began with effect from 15.07.3013 at ICDs Patparganj and Mulund. This is a prelude to extending RMS in exports to expedite the flow of export goods, reduce dwell time port congestion by limiting examination to the risky consignments on the basis of risk parameters.

Interactive Website
Indian Customs has developed a user friendly interactive website to enable importers / exporters to know tariff classification, applicable rate of Customs duty and other regulatory requirements for clearance of goods. Interactive website is an effective tool to help educate traders for making correct assessment of duty after introduction of self assessment in Customs.
Mandatory E-payment of Customs duty
E-payment of Customs duty has been made mandatory for importers registered under Accredited Clients Programme and importers paying customs duty of one lakh rupees or more per Bill of Entry with effect from 17.09.2012. Besides expediting the process of payment of duty and clearance of imported goods, the facility of e-payment has resulted in reduction of transaction costs.
Central Excise and Service Tax
Automation of Central Excise and Service Tax (ACES)
CBEC has implemented the Automation of Central Excise and Service Tax (ACES) project, a Mission Mode Project (MMP) of the Govt. of India under the National e-Governance Plan. ACES have transformed the way about 20 lakh indirect taxpayers conduct their business with the department. The application has been rolled-out nationally in 2009 in all 104 Commissionerates.
The following Taxpayer Services are provided under ACES:

·             Online PAN-based Registration of Central Excise & Service Tax Assesses and online amendment. ACES provides for online validation of PAN with the Income Tax database so that when any taxpayer enters a wrong PAN, the system will indicate the same.
·             Electronic filing of Claims, Permissions, Intimations and processing thereof
·             Instant e-acknowledgement of documents with Document Identification Number
·             Viewing, filing and tracking the status of documents online
·             Facility of e-Payment and checking status online
·             Online Revenue Reconciliation
·             Online Messages/ Alerts to users on business related matters
·             Online information to assesses about issuance of Show Cause Notice, Personal Hearing  and Orders passed by Adjudicating Authorities
·             Online filing of replies to Show cause Notices
·             Online filing of application for Provisional Assessment
·             Online filing and processing of Refund Claims
·             Online filing of selected Export related documents

Simplified Service Tax Refund Procedure
A simplified electronic Service Tax Refund mechanism which is beneficial to the exporting community, especially merchant exporters   was introduced in December, 2011. This export promotion scheme i.e. tax refund process, which is dealt with by the designated Central Excise and Service Tax officers, is electronically enabled under the Customs application (ICES 1.5).
 As a part of the Central Government initiative to improve the quality of public services, the Central Board of Excise & Customs (CBEC) has been identified as one of the 10 organizations with large citizen interface to implement the quality management system for public services. This is based on Indian Standard IS 15700:2005, prepared by the Bureau of Indian Standards (BIS), under the name of “SEVOTTAM”. As such at present we have 13 offices Sevottam Certified and 8 more Sevottam ready for certification Audit. The department has also selected 47 Commissionerates for Phase-III roll out.

CBEC has launched an e-helpline facility w.e.f. 1st October, 2012 at the Zonal levels for clarifying the doubts of trade and industry in an administration friendly manner without the assessee having to come to offices of the department. The main objective of the e-helpline is to provide help to the taxpayers in resolving procedural delays and in addressing system related problems including ACES and ICES.

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