Indian Customs Digital Journey – The Hindu BusinessLine
Gaurav Masaldan/R Ananth
Digital transformation is one of the main enablers of the ease of doing business. The World Customs Organization has also dedicated the year 2022 to “accelerating the digital transformation of customs by embracing a data culture and building a data ecosystem”.
The need for digital transformation in government services and especially in taxation, is well appreciated and understood. This was also underlined by Prime Minister Narendra Modi during the Rajsva Gyan Sangam, held in 2016, where he presented the “RAPID” charter for tax administrators, based on five essential elements: income, responsibility, probity, information and digitalization.
Indian Customs has been steadfast in its commitment to follow the letter and spirit of the above mandate and a series of Customs procedural reforms have been introduced over a period of time in this direction through the active exploitation of technology. As a result, India’s ranking in the World Bank’s Trading Across Borders Index (Ease of Doing Business (EoDB) has risen from 146 (2017) to 68 (2020). This transformational result has also been widely appreciated by the various stakeholders in the logistics supply chain.
Although Indian Customs has been using Sperry systems for data entry purposes since the 1980s, process automation began in 1995, with the introduction of India Customs EDI (Electronic Data Interchange) System (ICES) in New Delhi, followed by the introduction of a website. ICEGATE portal in 2003 and a risk management system (RMS) in 2006.
Consolidation of IT infrastructure in 2011 enabled rapid expansion to sites across the country. Today, electronic processing is enabled at 254 customs posts that handle more than 99% of the country’s trade.
In 2016, as part of the EoDB initiative to provide a single interface for all border clearances, the Single Window Interface for Trade Facilitation (SWIFT) was introduced to replace nine separate documents in customs declaration. importation, integrated risk assessment and electronic customs clearance from the partner. Government Agencies (PGA). This was followed by the introduction of an online document repository (eSANCHIT) in 2018, which enabled paperless processing and paved the way for further transformational reforms. Express Cargo Clearance Systems (ECCS) was also introduced for courier mode expedited shipments in 2017. In 2019, ATITHI, the mobile application was introduced to facilitate international travellers.
Integrated Risk Assessment is India’s innovation in One Stop Shops across the globe. This is made available by CBIC’s state-of-the-art risk management framework, enabling Customs to strike the right balance between facilitation and enforcement. Using a complex matrix of parameters, 85 percent of imports are cleared based on self-declaration. This is complemented by container scanning at major ports. Similarly, the drawback payment procedure has also been expedited on the basis of risk-based customs clearance.
In 2019, the Turant Customs program was introduced as a next-generation reform to transform customs clearance processes into a faceless, contactless and paperless experience for taxpayers. After the introduction of web-based cargo registration and automated customs clearance functionality, faceless valuation was implemented in 2020, to provide anonymity and specialization in customs valuation by unbundling geographic limitations, using technology.
This is supported by generating QR-based secure PDF copies of inbound and outbound invoices. All of these reforms have created an environment where the EXIM trade, involved in these processes, can fulfill online compliances. The depth of this change can be gauged by the fact that customs clearances have been largely unaffected by travel restrictions during the Covid pandemic.
The Authorized Economic Scheme (AEO), introduced in 2016, followed by the Port Direct Delivery Scheme in major ports, has given a further boost in streamlining logistics and reducing dwell time and costs for a significant portion of the trade. Time Release Studies (TRS) conducted annually by Customs formations, in accordance with the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO), measure dwell time with suggestions for further improvements. The National TRS is now conducted the first week of January every year to measure and improve customs processes to bring them in line with the best global standards.
Electronic Cargo Tracking Systems (ECTS) introduced for transit to Nepal has simplified the transit process. Electronic sealing of factory-packed containers has increased confidence in cargo integrity, while reducing dwell time. The blockchain-based pilot introduced in 2021 at ICD Tughlakabad, for electronic cargo tracking, is set to be a game-changer in transit management.
The new Sea Cargo Manifest Regulation (SCMTR) also strives to have end-to-end automation and bring transparency to the process. In 2021, Indian Customs also launched the Compliance Information Portal (CIP), which makes it easy for trade to know about all required compliances for cross-border trade, just a click away. Machine learning techniques are increasingly being deployed in risk management.
Likewise, the use of Data Analytics is of immense help in terms of risk profiling, detection of tax evasion and protection of the country’s economic borders.
Going forward, emerging technologies provide ample opportunity for the department to make further progress in the digital transformation of customs clearance processes. Automating bond management, manifest processing, data exchange with countries regarding certificates of origin and declaration can make customs clearance even easier.
The revamped ICEGATE portal will provide all the necessary information in a single dashboard. Non-intrusive technologies, both scanners and various wearable technologies, will enable smarter and less time-consuming cargo control and examination. The Internet of Things (IoT), including sensors and geolocation technologies, will help monitor the physical movement of goods and containers.
Building on its previous success in bringing about change through the use of technology, Indian Customs will strive to create an even simpler, more transparent and more facilitative environment for cross-border customs clearance for trade and industry. , without compromising the need for law enforcement.
Masaldan is Joint Secretary and Ananth is Assistant Secretary (Customs) at the Central Board of Excise and Customs (CBIC)
May 01, 2022