Cargo clearance remains a long haul for importers; industry seeks relief

Industry says goods originating from least-developing countries but routed through some other country are not getting the preferential duty benefit

After a temporary relief, importers’ woes continued with 55 per cent of sea cargo taking over three days to get cleared by Customs.

Only a third of the consignments are getting cleared within the two-day mark in line with the World Bank’s ease of doing business standards. 

Similarly, only 11 per cent of inland container cargo got cleared within 48 hours as on Saturday, while 51 per cent of the bills of entries were stuck for over three days, according to ICE-DASH, an interactive visual dashboard.

Industry attributed it to gaps in implementation of the faceless assessment regime, besides delay in clearance of imports from free trade areas that enjoy preferential duty. Meanwhile, the Central Board of Indirect Taxes and Customs (CBIC) has issued fresh instructions to expedite Customs clearance.

According to the Customs department, an internal case study of the Jawaharlal Nehru Customs House, Mumbai, showed that the average release time of imports has been consistently coming down since 2017. It has reduced from 181.34 hours in 2017 to 144.18 hours in 2018, 105.4 hours in 2019 to 91.65 hours in 2020. The fastest import documents were cleared in 14 minutes in 2019 and 6 minutes in 2020, the study revealed.

Dinesh Dua, chairman, Pharmaceutical Export Promotion Council of India (Pharmexil), said, “The reality is very different on the ground. The Customs department has been asked to go into the micro details of issues raised by importers.”

He pointed out that Customs officers have been raising multiple queries and asking the same question three to four times over, resulting in severe delays. “That is a big issue. And that's why you're getting delayed. So, the ground reality is different from what the Customs department is projecting,” said Dua, who attributed it to the lack of adequate training of officers to operate under the faceless assessment regime.

The matter was also raised by export promotion bodies at the board of trade meeting with commerce and industry minister Piyush Goyal earlier this month.

The department of revenue and Customs had said at the board of trade meeting that the faceless assessment mechanism is working very well and it has reduced the time of clearance.

However, industry representatives and associations pointed out that the situation was different on the ground.

“There are a few issues that need to be looked into. One is when the case moves to a faceless officer, and he is on leave, there is no mechanism to get the case diverted to someone else,” said Ajay Sahai, director general and chief executive officer (CEO), Federation of Indian Export Organisations (FIEO).  

Also, goods originating from least developing countries (LDC) but routed through some other country are not getting the preferential duty benefit. 

“Many times, LDC countries do not have marketing capabilities. So, they send the goods from say, Africa, and billing takes place in Dubai or Singapore, where the Customs officers are not allowing preferential duty benefits. Whereas, the whole objective of the LDC agreement was to provide support to goods originating from these countries,” said Sahai. 

The industry has asked the government to set a time limit for officers for clearing a bill of entry. “If, say, a bill of entry is not cleared within 24 hours, the officer must explain the reason for the delay,” said an industry representative. He added that sometimes the objections raised are irrelevant.

In view of the complaints from importers, the CBIC, in a set of instructions issued to field officers, asked them to avoid multiple queries and give importers an opportunity of being heard either through person or video-conferencing.

It further pointed out that the delays were also on account of clearing house agents still submitting supporting documents at the time of personal interaction with the appraising officer. Hence, all supporting documents would be mandatorily required to be uploaded in e-Sanchit from January 15.

ICE-DASH is an interactive visual dashboard that enables comparing the time taken for import cargo clearances at various ports and airports. A consignment cleared within 48 hours blinks green. Those taking more than 48 hours and up to 72 hours show amber, and the ones that take more than 72 hours red.

According to World Bank standards, sea consignments must get cleared within 48 hours and air consignments within 24 hours. India, on an average, takes 105 hours for cargo clearance.