EASE OF DOING BUSINESS AS A KEY INITIATIVE OF MAKE-IN-INDIA – CBEC NEEDS TO BE APPLAUDED (Sept 2016)

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Hon. Prime Minister of India is constantly reviewing the progress on his plan of implementation of “Ease of Doing Business”, which is the media for successful implementation of “Make-in-India” movement launched by him.

Chairman, CBEC and his team have come out the plans which is definitely emerged with out of box thinking and the measures initiated by them imposing the trust on trade & industries, importers & exporters are towards the call given by Hon. Prime Minister of India.

CBEC has issued following notifications and circulars, which is worthy to note and follow. It has definitely created positive impact & will reduce substantial transaction cost and transaction time.

Notification Dated Topic
Notification No. 66/2016 -Customs (N.T.) 14/05/2016 The Class of goods which shall be deposited in a special warehouse licenced under sub-section (1) of the section 58A
Notification No. 67/2016 -Customs (N.T.) 14/05/2016 The Warehoused Goods (Removal) Regulations, 2016
Notification No. 68/2016 -Customs (N.T.) 14/05/2016 The Warehouse (Custody and Handling of Goods) Regulations, 2016
Notification No. 69/2016 -Customs (N.T.) 14/05/2016 The Special Warehouse (Custody and Handling of Goods) Regulations, 2016
Notification No. 70/2016 -Customs (N.T.) 14/05/2016 Public Warehouse Licensing Regulations, 2016
Notification No. 71/2016 -Customs (N.T.) 14/05/2016 Private Warehouse Licensing Regulations, 2016
Notification No. 72/2016 -Customs (N.T.) 14/05/2016 Special Warehouse Licensing Regulations, 2016
Notification No. 44/2016 – Customs 29/07/2016 Amends Notification 52/2003-Customs dated 31.3.2003 and removes the condition of Private Bonded Warehouse for EOU

 

Circular Dated Topic
Circular No.17 / 2016-Customs 14/05/2016 Removal of goods from a customs station – instructions regarding affixation of one-time-lock
Circular No.18 / 2016-Customs 14/05/2016 Bond required to be filed under section 59
Circular No.19 / 2016-Customs 20/05/2016 Regarding allotment of Warehouse Code for Customs Bonded Warehouses
Circular No.21/ 2016-Customs 31/05/2016 Security under section 59 (3) of the Customs Act
Circular No.22/ 2016-Customs 31/05/2016 Procedure regarding filing of ex-bond bill of entry
Circular No.23/ 2016-Customs 01/06/2016 Manner of payment of interest on warehoused goods
Circular No.24/ 2016-Customs 02/06/2016 Requirement of Solvency Certificate for the purposes of Private Warehouse Licensing Regulations 2016
Circular No.25/ 2016-Customs 08/06/2016 Maintenance of records in relation to warehoused goods in electronic form, filing of returns and acknowledgement of receipt of goods
Circular No.26/ 2016-Customs 09/06/2016 Form of application for a License under Public Warehousing Licensing Regulations, 2016 / Private Warehousing Regulations, 2016 / Special Warehousing Regulations, 2016.
Circular No.31/ 2016-Customs 06/07/2016 Sale of goods at Duty Free Shops in Indian Currency
Circular No.32/ 2016-Customs 13/07/2016 Procedure regarding Duty Free Shops
Circular No.33/ 2016-Customs 22/07/2016 Review of entity based facilitation programs viz. Accredited Client Program (ACP) and Authorized Economic Operator (AEO) program — Revised Guidelines.
Circular No.35/ 2016-Customs 29/07/2016 Removal of mandatory warehousing requirements for EOUs, STPIs, EHTPs etc-Amendment to Notification 52/2003-Customs dt 31.3.2003.

 

Notification Dated Topic
Notification No. 27/2016 – C. Ex 26/07/2016 Seeks to partially exempt Central Excise duty on articles of jewellery falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986) manufactured by:
(a) re-conversion of jewellery given by the retail customer, or
(b) mounting of precious stone given by the retail customer.
Notification No. 28/2016 – C. Ex 26/07/2016 Seeks to amend notification No. 8/2003-Central Excise dated 1st March, 2003, so as to increase the SSI Exemption limit and the SSI Eligibility limit for articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central Excise Tariff Act, 1985 (5 of 1986).
Notification No. 31/2016 – C. Ex 24/08/2016 Amends Notification No.22/2003-Central Excise dated 31.3.2003 and removes the condition of Private Bonded Warehouse for EOU

 

Circular Dated Topic
Circular No. 1040/28/2016-CX 26-07-2016 Clarification on computation of exemption and eligibility and exemption limits and other related issues for small scale industries [SSI] exemption under Notification No. 8/2003-CE dated 1st March 2003 in respect manufacturer or principal manufacturer of articles of jewellery or parts of articles of jewellery or both
1041/29/2016-CX 26-07-2016 Guidelines for Excise Audit of Manufacturers / Principal Manufacturers of articles of jewellery or parts of articles of jewellery
1042/30/2016-CX 26-07-2016 Export related procedural simplifications – excise duty on articles of jewellery falling under heading 7113
1043/31/2016-CX 26-07-2016 General procedures regarding excise duty on articles of jewellery or parts of articles of jewellery or both falling under heading 7113
1044/32/2016-CX 26-07-2016 Guidelines for issue of summons, visits, search, seizure, arrest and prosecution regarding manufacturers or principal manufacturers of articles of jewellery or parts of articles of jewellery or both
1045/33/2016-CX 26-07-2016 Taxability of stock on February 29, 2016 – Excise duty imposition on articles of jewellery in the Budget 2016-17

It is observed from above that CBEC is really serious to resolve all the issues and practical difficulties faced by Trade & industries and importers & exporters.

This article deals with new facilitation programs of Accredited Client Program (ACP) and Authorized Economic Operator (AEO) program, which will bring the dream in reality to substantially reduce custom clearance time for imports and exports consignments. The prominent features of the new program are :

  1. Inclusion of Direct Port Delivery of imports to ensure just-in-time inventory management by manufacturers – clearance from wharf to warehouse
  2. Inclusion of Direct Port Entry for factory stuffed containers meant for export by AEOs
  3. Special focus on small and medium scale entities – any entity handling 25 import or export documents annually can become part of this program
  4. Provision of Deferred Payment of duties – delinking duty payment and Customs clearance
  5. Mutual Recognition Agreements with other Customs Administrations
  6. Faster disbursal of drawback amount
  7. Fast tracking of refunds and adjudications
  8. Extension of facilitation to exports in addition to imports
  9. Self-certified copies of FTA / PTA origin related or any other certificates required for clearance would be accepted
  10. Request based on-site inspection /examination
  11. Paperless declarations with no supporting documents
  12. Recognition by Partner Government Agencies and other Stakeholders as part of this program

The existing entities under AEO program are already accorded the status of AEO-T2 or AEO-LO and all entities under ACP Status have been granted one-time opportunity for transition to AEO status and they are provisionally granted registration under AEO-T1 category till the time they apply and decision is taken.

It is important to understand eligibility and benefits under AEO program:

Eligibility for obtaining AEO Status for T1, T2 & T3 Category are the same, but norms for compliances and benefits are different.

ELIGIBILITY:

All importers & exporters, economic operators including logistics providers, CHAs, warehouse owners, port operators, authorized couriers, etc., etc. but excluding bank, insurance companies and consultants.

BENEFITS:

  • AEO – T1
  1. They shall be accorded high level of facilitation in imports and export of their consignments, thereby ensuring shorter cargo release time.
  2. Facility of Direct Port Delivery (DPD) of their import Containers and/ or Direct Port Entry (DPE) of their Export Containers would be available to them. However, this facility will be dependent on the volume of their Import/ Export trade in terms of number of containers.
  3. ID cards to be granted to authorized personnel for hassle free entry to Custom Houses, CFSs and ICDs.
  4. Wherever feasible, they will get separate space earmarked in Custodian’s premises.
  5. In case they are required to furnish a Bank Guarantee, the quantum of the Bank Guarantee would be 50% of that required to be furnished by an importer/ exporter who is not an AEO Certificate Holder. However, this exemption fromBank guarantee wouldnot be applicable in cases where the Competent Authority orders furnishing of Bank Guarantee for provisional release of seized goods.
  6. Investigations, if any, in respect of Customs, Central Excise and Service Tax cases would be completed, as far as possible, in six to nine months.
  7. Dispute resolution at the level of Adjudicating Authorities in respect of Customs, Central Excise and Service Tax cases would be done preferably & as far as possible within six months.
  8. They will not be subjected to regular transactional PCA, instead of that onsite PCA will be conducted once in two years only.
  9. They will get an e-mail regarding arrival/ departure of the vessel carrying their consignments.
  10. 24/7 clearances on request at all sea ports and airports – No Merchant Overtime Fee (MOT) charges need to be paid.

 

  • AEO – T2
  1.  They shall be accorded higher level of facilitation (as compared to AEO-T1 in imports and export of their consignments.
  2. For Importers/Exporters not opting for DPD/DPE, seal verification/scrutiny of documents by Custom officers would be waived. Consignments would be given out of charge or let export order, as the case may be, without any scrutiny by the officers.
  3. The containers selected for scanning will be scanned on priority, by giving front line of treatment.
  4. Facility of deferred payment of duty will be provided, from a date to be notified
  5. Faster disbursal of drawback amount within 72 hours of EGM submission, from a date to be notified
  6. The BEs/SBs selected for Assessment and/or Examination will be processed on priority by the Customs officers.
  7. Facility of self -sealing of export goods would be allowed without the requirement to seek case to case base permission from the authorities
  8. Faster completion of Special Valuation Branch (‘SVB’) proceedings in case of related party imports and monitoring of such cases for time bound disposal in terms of new guidelines
  9. In case they are required to furnish a Bank Guarantee, the quantum of the Bank Guarantee would be 25% of that required to be furnished by an importer/ exporter who is not an AEO Certificate Holder. However, this exemption from Bank guarantee would not be applicable in cases where the Competent Authority orders furnishing of Bank Guarantee for provisional release of seized goods.
  10. They will be given facility to paste MRP stickers in their premises.
  11. They will not be subjected to regular transactional PCA instead of that onsite PCA will be conducted once in three years only.
  12. They will be given access to their consolidated import/export data through ICEGATE from a date that would be communicated separately.
  13. They will be provided the facility of submitting paperless declarations with no supporting documents in physical form.
  14. All Custom Houses will appoint a “Client Relationship Manager”(CRM) at the level of Deputy / Assistant Commissioner as a single point of interaction with them. The CRM would act as voice of the AEO within Customs in relation to legitimate concerns and issues of AEO and would assist in getting procedural and operational issues resolved by coordinating with different sections within Customs as well as other stakeholders.
  15. The refund/Rebate of Customs/Central Excise duty and Service Tax would be granted within 45 days of the submission of complete documents.
  16. They will get trade facilitation by a foreign Customs administration with whom India enters into a Mutual Recognition Agreement/Arrangement.

 

  • AEO – T3
  1. They shall be accorded highest level of facilitation, as compared to AEO-T2, in imports and export of their consignments.
  2. Their containers will not be selected for scanning except on the basis of specific intelligence. Further when any container is selected for scanning, top most priority will be given for scanning.
  3. The assessing/examining custom officer will rely on the self-certified copies of documents submitted by them without insisting upon original documents.
  4. They would not be required to furnish any Bank Guarantee. However, this exemption from Bank guarantee would not be applicable in cases where the Competent Authority orders furnishing of Bank Guarantee for provisional release of seized goods.
  5. An approach based on Risk based interventions, in case of requirements originating from the Acts administered by other Government Agencies/Departments, will be adopted for providing better facilitation in imports and export of their consignments.
  6. On request, they will be provided on-site inspection /examination.
  7. The refund/Rebate of Customs/Central Excise duty and Service Tax would be granted within 30 days of the submission of complete documents.

Importers and exporters are advised to fill up application form in Annexure-A giving full details and also provide the details in self-assessment form in prescribed annexures.

If any Importers and exporters wants their operations hurdle free, it is important to make an application for obtaining AEO Status and reduce their transactions cost & time.

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