Customs clearance regulations making importers nervous

Importers are getting anxious that Customs clearances of their consignments are being delayed deliberately. Many feel that the government is making conscious attempts to discourage imports, especially those originating in China and East Asia.

The stated policy of the government is to make it easy to do business. However, it is getting more difficult to clear the import consignments, since the Prime Minister’s call for ‘Atmanirbhar Bharat’ i.e. ‘self-reliant India’. Many have understood the policy as substitution of imports through domestic production, although top government functionaries have come out with many different, often contradictory, interpretations on what the policy of self-reliance means.

The government has raised import duties on several items and restricted import of many items subjecting them to import licensing. Besides, non-tariff barriers have also been introduced by way of mandatory quality control and pre-import registration processes. However, it appears whispers have also gone through the hierarchy to subject most goods originating from China and East Asia to greater levels of examination and to raise queries on classification and valuation. 

The introduction of new rules casting onerous obligations on the importers who want to claim preferential tariff under various trade agreements has also made importers more nervous. They fear that any doubts raised about the Certificate of Origin will result in clearance of their goods under provisional assessment against 100 per cent bank guarantee and denial of lower duty rates later. 

The faceless assessment scheme has meant that the bills of entry go for assessment to officers located away from the port of import, who raise their queries through email. Many licensed Customs brokers are used to explaining the correct position to the assessing officers in person. Now the option is closed and they have to reply to the queries through email and try to convince the officers through written communication. Not all are very good with their written communication skills. This also causes delays and hold-ups of import consignments.   The Central Board of Indirect Taxes and Customs has issued all the right kinds of instructions to expedite import clearances but at the operating levels, the delays and uncertainties have increased. 

Even the importers of raw materials and components required for manufacturing activity face uncertainties and delays in getting their imported consignments cleared through the Customs. Even after clearances, the government officers visit them to investigate whether they have imported sub-standard items. 

Drug control inspectors have visited the premises of highly quality conscious pharmaceutical manufacturers, well established since several decades and exporting to dozens of countries since long, to draw samples from consignments of imported raw materials and to subject them to tests in government laboratories to check whether they are of standard quality.

So, it is not that only the domestic slowdown has caused a fall in demand for imports. Even the apprehensions of harassment by the Customs and other government officials are keeping many manufacturers and traders from importing the goods. The net result is that not only have the imports gone down but fewer vessels are coming to India and fewer containers are getting released for exports. 

Consequently, non-availability of containers and shipping space for exports and delay in getting vessels to ship the cargo are hurting the exporters besides the steep rise in freight rates due to import-export imbalances and container demand-supply mismatches. 

email: tncrajagopalan@gmail.com