The Kelkar Committee had taken note that exporters are required to maintain account at the designated bank branches at each of the customs station from where they export under drawback claims. This resulted in the need to maintain minimum balances and also transaction costs in transferring the money. The Committee had recommended that the Customs must make arrangements to remit the money to the bank account of exporter's choice.

With the advent of Core Banking Solutions (CBS), Real time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT), the Customs will now implement the recommendations. The detailed procedures are given in Circular no. 01/2008-Systems dated July 1, 2008. Thus, it will no longer be mandatory for new exporters to open a bank account only with the designated authorised branch at the port of export.

The commerce minister announced last April that with effect from July 1, 2008, Advance Authorisation Scheme and Export Promotion Capital Goods scheme will be EDI-enabled through electronic message exchange. This will do away with the present requirement of physical verification and registration at the Customs end.

There is no news regarding its implementation. It should be done soon and even transmission of details regarding realisation of export proceeds from Banks to the Customs and Regional Licensing Authorities should be implemented with a view to eliminate unnecessary paperwork and transaction costs.

Central Excise, Customs and Service Tax assesees have to take note that the government has notified the necessary Rules and issued detailed instructions on July 1, 2008 for provisional attachment of property immediately after issue of Show Cause Notice. The instructions say there should be sufficient justification to hold a view that the provisional attachment of property is necessary to protect the interests of revenue. The remedy of attachment being extraordinary, has to be resorted to with maximum care and only for outstanding dues of over Rs 25 lacs.

The concerned officer is must recommend provisional attachment within a month of SCN to the Commissioner, who will, if satisfied, serve a notice to the person whose property is to be attached to state his case within 15 days and may, within further 15 days after hearing the party, order the attachment.

The Circular says appropriate disciplinary action shall be initiated against the officers found to exercise the powers of provisional attachment of property frivolously. But, this is likely to be of little consolation to the assessee who will be threatened into submission by this tool of the Revenue officials.

Meanwhile, the Commerce Ministry has inserted a provision in the Foreign Trade Policy to state earlier Public Notices, Policy Circulars, Notifications or Decisions will also be deemed to be in force as if promulgated under the current policy to the extent they are not inconsistent with the provisions of the present policy and procedure.

tncr@sify.com