The Central Board of Excise and Customs (CBEC) has decided to rely more on declarations of importers and exporters for automatic clearance of consignments at Customs stations and to resort to post-clearance verification of correctness of declarations/documents at an importer’s or exporter’s premises to detect any infringement.
The attempts to put in place a credible self-assessment scheme for customs clearances started in 1997 with the introduction of Fast Track Clearance for goods imported by select eligible importers.
In 2003, the finance minister announced in his Budget speech that to bring our customs clearance procedures at par with best international practices, self-assessment scheme would be introduced wherein, the importer himself/herself would determine the classification of goods, including claim for any exemption benefit, and the system was to calculate the duty based on his/her declaration.
Physical inspection of imported goods was to be done by using risk-assessment and management techniques on a computer-based system and not on the orders of customs examining staff.
The existing system of concurrent audit of import documents was to be replaced by post-clearance audit, as prevalent in developed countries, he said. The CBEC followed with detailed instructions giving partial effect to his announcements.
In 2005, the CBEC introduced the Risk Management System (RMS) and Accredited Clients Programme(ACP). The primary objective was to strike an optimal balance between facilitation and enforcement and to promote a culture of compliance.
The idea was to discontinue the practice of routine assessment, concurrent audit and examination of almost all bills of entry and focus on quality assessment, examination and post-clearance audit of bills of entry selected by the RMS.
In 2007, the CBEC defined a charter for a newly created Risk Management Division at the Director of Systems and set up Risk Management Committees at the national and local levels. Even so, it was found that the level of facilitation on an average was 60 per cent, 50 per cent and 40 per cent at Air, Sea and ICD (Inland Container Depot) Customs respectively.
Also, large numbers of transaction selected by RMS were actually found to be compliant. It was also found that faulty and indiscriminate construction of targets, etc. by local commissioners resulted in false hits and unnecessary intervention.
This year, the legal framework was provided for self-assessment by amending Sections 17, 46 and 50 of the Customs Act, 1962, placing the responsibility of filing correct declaration on the importer/exporter.
The amended law provided for intervention by Customs in cases selected by RMS and in rare cases by Commissioner of Customs or an officer authorised by him. Such selected cases could be taken up for verification or examination and re-assessment. Other cases were to be straightaway facilitated for clearance without assessment and examination, on payment of duty, if any.
Now, the CBEC (through its Circular no. 39/2011 dated 2.9.2011) has instructed that facilitation target of 80 per cent for Air Cargo Complexes, 70 per cent for Seaports and 60 per cent for ICDs should be achieved in the next six months.
While this will help faster customs clearance, the cases requiring production of bonds, licences, etc, and import of second-hand goods, sensitive goods, precious metals, scrap, waste, dross, etc, will still involve active intervention by the Customs.