Make trade faster, easier and cheaper with technology.
Provide clarity, efficiency and transparency to importers and exporters to minimise bureaucracy and corruption.
Of these two objectives, there has been a remarkable improvement in efficiency and clearance time due to:
Process reforms by customs and other border agencies.
Deeper penetration of technology, especially the adoption of the Single Window Interface for Facilitation of Trade (SWIFT) and scanning of containers, the use of state-of-the-art analytics for risk management and infrastructure augmentation at ports.A clear indicator is a steady decline in the average release time (ART) of cargo as measured in the yearly National Time Release Study (NTRS). It shows that NTFAP targets – 24 hours for airports, and 48 hours for marine and land ports – have been achieved for risk-free consignments. For others, the NTFAP target is within reach.As far as process improvements go, two broad areas impact ART:
Risk management: A robust system determines the percentage of cases selected for interdiction, either for documentary verification or more intrusive examination/inspection of cargo. With the deployment of AI, ML and Big Data, there is sharper targeting.
Faceless assessment scheme: Introduced in 2020, this covers all customs assessments. The objectives were to impart greater objectivity in assessments and uniformity of treatment across locations. However, NTRS 2023 findings suggest that there is a need to enforce greater accountability of national assessment coordinators for taking up cases where they notice divergences in evaluation for the same commodity for deeper scrutiny to harmonise positions.
The other concern remains the lack of a breakthrough in the ART of export cargo. NTRS 2023 revealed some hurdles.
The post-regulatory approval stage takes significant time.
Delays regarding the rearrangement of ‘less than container load’ cargo is more pronounced.
Exporters in the hinterland do not have easy access to real-time information about the arrival or departure schedules of vessels, port traffic and congestion status. A multidisciplinary expert committee should recommend steps to solve the problem.
The next generation of trade facilitation reforms must focus on the quality of outcomes or decisions taken by regulatory agencies, particularly customs. This would mean effective grievance redressal and fairer dispute resolution. There are mechanisms to ensure timely redressal, where necessary, through escalation to higher authorities, but the quality of disposal may still be an issue.
Embargo on reopening assessments owing purely to differences in interpretation of the law (say, classification under the tariff) beyond the normal period of limitation of two years, for instance, must be effectively enforced. Unless, that is, the importer/exporter’s interpretation stems from misdeclaration or suppression.
The department must set an example by reviewing orders found to be unreasonable and reskill officers who pass such orders. There needs to be much more extensive sensitisation and capacity-building in the exercise of reasonableness across levels and processes, such as investigations, audits, issuance of show-cause notices, conducting adjudications and deciding appeals.
If first-gen reforms rightly concentrated on achieving quantitative targets of ART of cargo, the next one must focus on the quality of outcomes and fairness in decision-making, the benefits of which would be far more significant.
The writer is former chairman, Central Board of Indirect Taxes and Customs
