How ICEGATE is making the functioning of EOUs and SEZs difficult

In her Budget speech last year (July 2024), the Finance Minister said that all the services of Customs shall be digitized and made paperless over the next two years. She should make sure it happens with least disruptions to the trade. 

The implementation of the Goods and Services Tax (GST) regime imposed heavy costs on the trade due to unpreparedness of the GST Network, the digital platform, to handle the processes. Similar unpreparedness hurts the trade whenever ICEGATE, the portal for handling the Customs transactions electronically, implements a new application. For example, the implementation of the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022, electronically for export oriented units (EOU) last year was quite messy and is yet to stabilize.  

The Special Economic Zone (SEZ) entities are also facing nightmarish difficulties while putting through their transactions, barring some exceptions, through ICEGATE, since last July.  For the exceptions, such as SEZ to EOU transactions, procurement from DTA etc., SEZ entities are now filing their B/Es etc. through sezonline.com, a website developed by NSDL Deposit Management Limited and Infosys but these types of transaction will also have to be put through ICEGATE from the beginning of next month. 

The SEZ entities have a long list of complaints. (i) ICEGATE registers the digital signatures of a principal person (parent) plus a few others (child) designated by an SEZ entity. Now, the system allows only the parent to log in and approve the B/Es or S/Bs. If the designated parent is unavailable for any reason, the documents cannot be filed and clearances get delayed. (ii) Section 30 of the SEZ Act, 2005, read with Rule 48(3) of the SEZ Rules 2006 says that when goods brought from domestic tariff area (DTA) are sent back by SEZ to DTA, they should be treated as re-imported goods.  

However, the ICEGATE does not allow claiming the benefit of notification 45/2017-Cus dated 30th June 2017, available for re-import of exported goods. (iii) The ICEGATE asks for intervention of the drug control administration even for clearance from SEZ to DTA of drugs or drug intermediates, whether brought earlier from DTA or manufactured from such inputs.  (iv) In recent weeks, few B/Es get cleared under self-assessment in the ICEGATE system. (v) Many B/Es do not get transmitted to the RBI’s IDPMS (Import Data Processing and Monitoring System). (vi) When a B/E is filed for clearance to DTA, any queries raised by the assessing officer goes only to the DTA party, who may not be registered with ICEGATE. (vii) The SEZ unit’s bond account is debited or credited at the time of import/export but many non-SEZ B/Es also get into the bond account. (viii) Credits under the Rodtep (Remission of Duties and Taxes on Export Products) are not received. (ix) ‘Let Export Order’ copies are delayed 

(x) ICEGATE processes are time consuming. 

These are only some of the many more irritants that stifle the functioning of the SEZs. Many executives at the operating levels feel that the ICEGATE officials are not fully aware of the relevant laws and procedures and are also insensitive to the difficulties at the ground level. The Finance Ministry should ensure that ICEGATE modules are robustly tested before implementation and hold accountable those responsible for inflicting unnecessary costs on trade.   

email : tncrajagopalan@gmail.com