India ready to roll out easier customs rules in WTO push
September, 11th 2014
The commerce and revenue departments have worked out the details of India's commitment under the proposed trade facilitation agreement even as negotiators at the World Trade Organization in Geneva are trying to deal with the county's concerns on subsidy payments to farmers.
The plan worked out in Bali last December had suggested that countries sequence their commitments on the Trade Facilitation Agreement (TFA) in three stages. The first one or Category A needs countries to notify disciplines or activities that will be implemented as soon as the agreement is in place. Category B involves the list of activities that will be implemented at a later date, while Category C deals with issues that need additional time and may involve financial support, which India will not seek.
The arrangement worked by Indian authorities involves offering commitments across disciplines with none of the issues being kept in Category C, top-ranking government officials told TOI. A majority of the issues are being put in Category A, with disciplines requiring major legal and administrative changes and those involving investment in modernization in Category B.
"India is already implementing a majority of the disciplines that have been agreed to at WTO, although some of our rules may need minor tweaking. While we are using the agreement for domestic reforms, our negotiators have also done a great job in ensuring that we are not burdened with tough commitments," said an official.
The changes will be few. For instance, TFA requires the provision of advance ruling to be extended to anyone, who has a justifiable cause, which is not currently provided under Indian rules. Advance ruling is a facility that allows companies to get an advice from a panel on the tax implications for a particular transaction. Currently, the facility is not available to exporters and importers, which will now be dealt with through an amendment to the Customs Act.
Similarly, the customs authorities publish the rules and hold consultations during their preparation, although there is no legal provision for it. So, the government will have to amend the law and put in place detailed rules to meet the new TFA norms. The government will also need to set up a National Trade Facilitation Committee, and arrangements related to Border Agency Cooperation and Customs Cooperation. Sources said the Central Bureau of Excise & Customs is also looking to upgrade the infrastructure through a series of measures. For example, it will soon set up National Enquiry Points and also have a single window for export, import and transit related clearances.
Rules are also being put in place to ensure that there is a provision for release of goods prior to final determination of duty if it is not done "prior to or as rapidly as possible. It will also start publishing the average release time that is provided for in TFA." But, the implementation of the agreement depends on finding a final solution to India's concerns on food security, which in the coming years will impact the government's ability to fix the minimum support price for wheat and rice.