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Customs clearance takes the super-fast track
September, 14th 2009

A silent revolution is taking place in the countrys airports and ports one that will alter India's notoriously troublesome Customs clearance procedures, both at entry and exit points.

Export consignments will no longer have to undergo the drudgery of long Customs clearance procedures. And the facility will be extended to courier services or even passengers after some time. Such a system exists for imported goods and has met with a huge success.

At the heart of the reforms is a risk-management system (RMS) that drastically reduces the intervention of the Customs department in picking up cases for scrutiny. Customs officers will only act on alerts sent by the RMS, which is a special online clearance system. The RMS has collected a huge database over the years through passport/visa details for passengers and export and import forms filed before the trade happens.

For accredited importers, the department has already abolished the present practice of routing assessment and concurrent audit of all bills of entry (the preliminary form submitted by the importer before importing goods), greatly reducing the time taken for Custom clearances. Customs officials said other schemes like self-assessment of goods, fast track/green channel for passengers and so on will also be done away with in a phased manner as and when the RMS service widens.

The RMS currently selects cases for scrutiny when the importer files bills of entry (the forms for import). This is done digitally on the basis of certain parameters, such as whether the consignment carries any duty benefit, destination, nature of goods, importers track record, Custom agents track record and so on.

G Ravindranath, additional director, RMS, Customs, said the objective of the RMS was to balance enforcement with customer service. Instead of routine physical examination and assessment of all cargo, only a few cases will be picked for scrutiny, based on alerts provided by the RMS.

This has not only reduced the dwell time (the total time taken for assessment of goods, payment of duty and final delivery) and saved transactions, costs for importers, but also has helped the Customs department to garner more revenue through quality assessments, he said.

For imports, the dwell time has come down by two to three days, compared to seven to eight days earlier. Officials said more time could be saved if the importers were ready with their duty payments without waiting for the Customs agents to contact them. In essence, they could choose to make online payments. Officials also explained that for exports, the primary criterion for scrutiny will be to assess those goods that have been given export benefits.

The system is working very well. Things could be made much faster if the import consignment of reputed business groups who have been importing for a long time could be completely exempt from customs clearance, said Jayant Lapsia, clearing and forwarding agent and president of All India Liquid Bulk Importer/exporter association.

The department should also remove technical failures in the system because if one item is stuck, the entire consignment of an importer gets stuck even if all others are cleared, he added.

The government mopped up an additional revenue of Rs 2,363 crore in 2008-09 from the Customs department due to the RMS-driven custom clearance alone. The RMS system was suggested in 2005 by an inter-ministerial group headed by then revenue secretary for trade facilitation and selective screening of only high-risk cargo. It was implemented towards the end of last year.

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