Modi government to change customs duty architecture to boost trade, ease of doing business


NEW DELHI: After rolling out the most comprehensive indirect tax reform – the goods and services tax – the Narendra Modi-led NDA government is set to unleash the next generation of changes to the customs duty architecture to speed up India’s trade and improve the ease of doing business.

The proposed changes seek to do away with face-to-face contact with tax officials, automate the release of goods and ensure e-traceability of shipments, measures that can substantially reduce corruption and allow faster movement of merchandise.

“We want to go in for something which will be radically different from what we have been doing. We are going to venture into a new territory called faceless assessment… We could start a pilot in a month’s time,” Central Board of Indirect Taxes and Customs chairman S Ramesh told ET in an exclusive interview.

Ramesh, who took over as chairman in June, said the idea is to work towards getting into the top 50 ranking of the World Bank’s Ease of Doing Business. In the ‘trading across borders’ category, India leapt to 80th rank from 146th.

Elaborating on the proposed ‘faceless’ assessment, Ramesh said the board will soon initiate discussions with the trade and examine if any legal or statutory changes would be required. He said the ideal situation would be that goods landing in Nhava Sheva (Mumbai) can be assessed in Chennai and shipments in one category, say motorcars, can be assessed at one location, allowing development of specialisation and expertise.

“This is where the world is going. This is one of the best practices of the World Customs Organisation… Scope for rent seeking will absolutely vanish and speed of clearance will go up manifold,” he said.

Once this is rolled out, an importer in New Delhi would be able to get cargo assessed in Chennai without needing to physically get in touch with the local customs. The faceless interface would also be used for automated release of cargo, which will allow an importer or an agent to receive an email or an SMS alert that the goods are ready for collection, without having to interact with any customs officer at the port. This would be done for low-risk and trusted traders and low-risk commodities.

Ramesh said internal brainstorming is going on to see how India can take the next quantum leap in the Doing Business ranking. “Virtual groups have been formed… We feel we need to build upon what has been done,” he said, adding that the customs proposes to expand the E-Sanchit facility, which allows importers to upload all documents online, to exporters.

It plans to bring export promotion councils and the Directorate General of Foreign Trade on board the customs portal to make the whole experience seamless and paperless for exporters in the next two to three months. Ramesh said that as part of the national trade facilitation programme, the cabinet secretary has written to ports to streamline their infrastructure for smooth and speedier cargo movement. Port IT systems are being integrated with the customs portal.

Ramesh said the board is making all efforts to meet the indirect tax target for the year and revenue collection in many states had improved. Efforts are being made to intensively use data analytics to check for systemic attempts to evade GST and the Directorate General of Analytics and Risk Management has been set up for this.

On the pendency in GST refunds, he said 95% of the integrated GST refunds amounting to Rs 47,161 crore had been disposed of. In the case of input tax credit refunds, more than 96% of the amount has been cleared. Of the Rs 24,788 crore amount claimed in applications, he said Rs 24,012 crore had been disposed of. Besides, he said, a solution is being devised for refund applications with documents to be filed online, obviating the need to visit the tax office.

He said the format of the new simplified GST form has been finalised after extensive consultations with trade and industry but the changes have not been made effective as states are yet to pass it in their GST legislation. To a question on whether the tenure of the National Anti-Profiteering Authority would be extended beyond two years, Ramesh said it would be the GST Council’s call.

“It is a call for the GST Council to make. However, many instances of anti-profiteering are still being investigated and the provisions of the GST rules allow this extension, if need be,” he said.

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