Governance & Social Justice
- Is it Unhealthy to Eat out in India?
- New National Education Policy
- SDG Gender Index 2019
- Self Help Group market linkages
- Supreme Court stops Maharashtra EWS quota
- Draft National Education Policy Controversy
- Acute Encephalitis Syndrome in muzaffarpur of bihar
- Private sector specialist in government jobs
- Abujh Maria PVTGs
- AWaRe: A WHO tool for safer use of antibiotics
- Digital Village Scheme 2.0
- Back to Village program in Jammu & Kashmir
- Child Labour in India – National Child Labour Project Scheme
- Operation Cleanup begins, Modi Government 2.0 dismisses corrupt officials
- 23rd St Petersburg International Economic Forum
- Will Financial Action Task Force put Pakistan in its Blacklist
- How powerful is the International Court of Justice?
- PM Modi in Maldives
- U.S. Now Requiring Social Media Details From All Visa Applicants
- United Nations Demands Britain To End Rule Of Chagos Islands In Six Months
- Chinese Language made Compulsory in Nepal
- Hong Kong Protests 2019
- India Invited to G-7 Summit
- PM Modi in Sri Lanka
- SCO Summit 2019
- Indian Navy Launches Operation Sankalp
- Iran shoots down US drone aircraft
- Pakistan Saved from FATF BlackList
- India warns of Commonwealth Games boycott
- Sudan political crisis
- Foreign Policy of India
- Modi 2.0, Ministry of External Affairs Opportunities & Challenges
- Guthi Bill protests in Nepal
- G 20 Summit 2019
- United Nation security council
- Agricultural self sustainability & food security of India
- Benefits of Cluster based modern Industry
- CBDT tweaks Income Tax rules for Senior Citizens
- Code on Wages Bill needs to be tweaked
- Custom Reforms in India
- Food processing in India
- Foreign Trade of India
- How to revive demand in Indian Economy?
- India’s Foreign Trade Slowdown
- India’s solar manufacturing strategy
- IndiGo Promoters Spat Controversy
- RBI’s revised circular on NPA
- Status of Self Employment in India
- What is Demographic Distress?
- What is Priority Sector Lending Limit?
- What is Strategic Overseas Fund?
- Jal Shakti Ministry launched
- India No Longer World’s Fastest Growing Economy
- Kolhapuri Chappal get Geographical Indication Tag
- Kaleshwaram Lift Irrigation Project
- Government’s plan for Digital Payment in India
- Retail inflation at 7 month high
- What is Middle Income Trap?
- Wholesale Price Index Inflation hits 22 month low in May
- India & World Trade Organisation
- India USA Trade War
- RBI purchases Government Securities worth Rs 12500 Crore
- What are BASEL III norms?
- World Bank’s Global Economic Prospects Report
- SEBI new norms for Credit Rating Agencies
- Telecom Sector in India
- Chennai water crisis
- One Nation one ration card
- Railway testing Tri-Netra Technology
Defence & Security
Science & Technology
- Air Pollution and Human Health
- Chennai Salem Highway Case Controversy
- Global Concentration of Atmospheric CO2
- One Health Philosophy
- Arctic Kelps: Underwater forests in the Arctic
- India unlikely to meet carbon sink commitment
- Asiatic lion radio collaring
- Japan decides to start Commercial Whale Hunting
- Phayeng becomes first Carbon Positive village
- Fall Army Worm Attack in India
Why in news?
- Expressing customs rules and codes in simple prose will go a long way in making foreign trade transactions less cumbersome.
- Every year, merchandise of value $840 billion (2018 figure) equal to about 30% of the GDP passes through Indian Customs before it could be exported or imported.
- Here are 10 suggestions to improve Customs’ functioning. Implementing these will have a significant impact.
- The first four suggestions relate to improving information flow.
- The remaining six are about making Customs processes more efficient.
Simplifying the language
- Notifying import duty is a crucial task of Customs. Yet, finding correct Customs duty for a product is a pain. You need an expert to wade through the maze of hundreds of Customs notifications issued every year.
- The notifications are not self-contained and amend part of an earlier notification issued years ago.
- Further, many exemption notifications do not mention precise HS (harmonized Structure) codes. This makes expert intervention necessary in deciding the import duty.
- The way out is to rescind the old notification while issuing a new notification. Or publish an updated version.
- Make new notification self-contained.
- Each notification should list effects of the notification, a practice followed by the DGFT.
- Also, create a searchable database of all notifications with a free text search.
- All duties on all products with every condition should be available on a single excel sheet.
- Such simple changes will eliminate plenty of go-betweens.
Use standard codes for the Duty Drawback scheme
- The government has adopted the eight-digit ITC (HS) Codes for exports-imports.
- But, the drawback scheme, the largest indirect tax refund scheme, uses only the first four digits of the ITC (HS) Codes.
- For the next digits, it uses its own product codes and description.
- This forces exporters to use two different codes for the same product and creates confusion.
- A Mobile phone is India’s top electronic import item. Yet, it is covered under the description ‘Others’ in ITC(HS) schedule.
- The schedule covers over 2,300 entries that together cover over 25% of India’s imports as ‘Others.’
- Customs must identify major items traded under the ‘Others’ categories.
- This will give a clear picture of the trade profile and check any misuse.
- Importers and exporters can appeal to the tribunals against the decisions of the Customs on issues like valuation, classification or penalties.
- Though tribunal orders are the public documents, these are not available in an online searchable database.
- Availability of earlier decisions through a searchable database would allow trade to get transparent and uniform understanding of precedence and help them in making informed decisions.
- Further, it would also potentially ensure that tribunals themselves adhere to existing precedence to a greater degree and thereby reduce the time for decision making.
Minimise customs processing
- All consignments which are given the green signal by Customs Risk Management System (RMS) should be allowed Direct Port Delivery or DPD facility if customs duty is paid within 24 hours of container arriving in the terminal.
- Today less than 50% of containers use DPD facility. This means extra cost of shifting and housing of container at the Container Freight Stations (CFS).
Direct Port Entry (DPE)
- All firms with self-sealing permission by Customs are currently allowed DPE facility.
- For the remaining firms, Customs could consider developing on-site inspection and e-sealing facilities in all major ICDs, transport clusters and ‘transport nagars.’
- The GST officials could support the on-site sealing exercise. RFID seal is tamper proof and no further Customs checking at the port would be needed.
- When goods arrive at a port, customs officers would already have the required information and the Let Export Order (LEO) can be generated online. This action will bring down customs processing time at a port to near zero levels.
Risk Management System (RMS)
- Customs uses a sophisticated Risk Management System or RMS. But many times, Customs officers have reasons to reject RMS recommendations and go for inspection of the goods.
- The basis of decision making must be entered into the system, and available under RTI with adequate anonymisation of individual shipments and their consignees, along with figures indicating to what extent in percentage terms the over-ride led to an actual finding of non-compliance.
- Customs may use this data for developing analytics tools that will further reduce RMS over-ride by establishing guidelines for officers for making such decisions.
- All physical inspection must happen under CCTV recording in designated inspection zones.
- And the record must be retained for adequate time and be made accessible to the consignee/consignor and their agent.
- All terminal operators/ICDs/CFS must be mandated to develop facilities sufficient to support this.
- Custom’s eSanchit system allows traders to upload scanned copies of documents. But a large number of uploads make the system slow. Also, information contained in the documents cannot be used by the system.
- Replace upload of documents with a digital entry of the required information. This will allow RMS based processing.
- Scanned copies of the documents can only be asked when RMS recommends. This step will also facilitate more straightforward implementation of AI-based automated processing.
- Cases of under-invoicing of consumer and intermediate goods, especially those imported from Middle-East, East and South-East Asia is a concern.
- Setting a reference price for a festival and similar imports may be a good starting point.
- The above suggested changes can be implemented with minimal investments.
- The resulting enhanced transparency would reduce cost and time of doing business and improve India’s export performance.
- Suggest measures to reform customs’ functioning in India. Examine how these will lift our foreign trade.