© confederation of indian industry task force on transaction cost airports: mumbai, delhi &...

© Confederation of Indian Industry

Task Force on Transaction Cost

Airports: Mumbai, Delhi & Chennai Seaport: Chennai


Some observations

Better management of loading and unloading at the port/terminal. Let Export trucks be allowed 24X7 as it would even out the cargo

clearance at the cargo facility. As of now, extreme rush after 3 PM. Have one unique identification number for each export consignment

instead of many numbers ( could be shipping bill number ) —like AWB, MAWB, Carting application etc

Integrate the network systems of the custodian, CFA, DGFT as all these systems should be talking to each other. This will reduce duplication of data feeding.

Have one single comprehensive form with the information being filled up as and when it comes in. This will remove the repetition of data filling by the PO (Preventive officer) , EO, ( Examination Officer ) , Appraiser

Let it be assembly line seating arrangement for cargo clearance.—mainly at Mumbai and Chennai facility. In Delhi seating is better


Contd….

About 30 % of the export consignments undergo examination at port. This figure needs to come down which might happen with RMS.

Non availability of containers/vessel at the right time and Freight consolidation by the forwarders takes a lot of time. Thus reduce the storage free time at the Cargo facility from 72 hours to 24 hours.

Introduce the Shipping Trade Practices Act. It is still at the Bill stage.


Some issues:

The insurance agent needs to be informed within 24 hours of shipment leaving the factory, otherwise Agent will not pay premium. Billing breakup generated should be used for insurance purpose.

At times, the shipping lines give premium to exporters for using their shipping lines, but the system does not accept “0 “value and the shipping bill is not generated. System should accept a “0” value if not negative value.

In classification, advance ruling of customs should be there. Classification of goods should be done before and not left at the discretion of the officer. For repeat products there should be self-declaration.

After physical examination, repacking the consignment an issue .Also the Shipping bill shows that, “ not opened for physical examination by customs”. The buyer claims damages.

Suggestion: the official doing physical examination can have a sealing tape with opened by customs written.


Some other issues Contd… Sample testing--look into number of consignments, sample size, from

factory for sample testing, goes to lab outside the Airport for testing, clarity of testing authority ( eg wildlife )

Allied Acts add to Transaction cost big time. Need to look into it

Once credentials of exporters established , like Status holder exporter then ease the process

If the exporter is taking no incentives then for factory stuffed cargo no examination should be required. Also pelletisation should be allowed at offsite facility. Also fragile cargo , like fish, flowers should be handled at an offsite facility.


Some other issues Contd…

At the time of applying for waiver and transferability redemption, a certificate by CA is required, even if it is SION based. CA Certificate should be dispensed with as license is issued by SION basis.

For all Reward Schemes and Export Obligation of Advance Authorisation and EPCG Schemes, EDI should be established with customs for shipping bills. The requirement of hard copy of Shipping bills should be done away with.

When applying for FPS scheme, copy of IE Code has to be attached. Should be done away with as it is available online


Specific Case of Leather Exports: When the cargo reaches the Cargo facility, checked by Cargo agent

along with custodian for weight and measurement. If it does not tally then amendment required to be made. If it is OK then following documents are required in 6 sets:

1. Invoice

2. Packing list

3. Shipping bill

Following Self Declarations Required which can be done away with Leather declaration—Dispense with as it is eligible for drawback for

all leather and leather products whether it is imported leather used or indigenous finished leather use.

Cenvat declaration—Dispense with as leather garments and finished leathers are non cenvatable.

SDF Declaration—for foreign exchange


Cont..

Leather exporters need CLRI report. The Air customs accepts while the sea cargo does not accept the CLRI report.

Also finished leather products are held by the customs for 3-4 days for examination particularly at Sea customs. ( though the EXIM Policy says that any Export consignment cannot be held for more than 24 hours )


DGFT Related issues:

E-BRC to be accepted by Central excise and Customs also. RCMC not required SSI / IEM / Heavy Industries License – Manufacturing Item. The same

need to incorporated in the licence . No need to be so specific As per Para. 4.7.1 of HBP Gives provision of Rs. 5 cr of import without

Bank Guarantee, whereas customs is not accepting, but they follow Circular 58/2004-Cus 21.10.04. even in para 2.20 of HBP says that BG is as per Circular 58/2004-Cus 21.10.04

EPCG- Export Obligation – Block wise ( 4 & 6 yrs) to be re-looked FMS / FPS ( All types of Incentives) is not accepted by all central Excise

against Excise Duty No TED - Benefits for who can avail Cenvat Credit. Unnecessary

documents like duty paid certificate and Non availment of cenvat credit Certificate of Origin to be issued by Govt. department (JDGFT /

Inspection Agencies) without fees


Port Trust

At the time of export, Boat - note should not be required. (Tally clerk already there and Wharfage is paid to the porters)


Central Excise

Export Bond should not mention Chapter Classification

Export Bond Value to be irrespective of Excise Duty

Clarification of tariff should be to the benefit of exporter or importer

Time Bound at DGFT – 9.11 of HBP why not at Customs and central Excise

Triplicate copy of ARE-1 to be signed by the range Superintendent. This leads to more paper work and delay in incentives and POE.

Original and duplicate of A.R.E.1 to be stopped. The document should be sent online to all other related government departments


Customs

Shipping Bill should go online to DGFT / JDGFT

E.P Copy generation late in customs. Total incentive or Proof of Export Generation is stopped. This can happen at the time of release of Shipping Bill itself as in ICD’s

Insurance Certificate / Freight Certificates should not be required

Excess Duty Any Commissionerate should accept

Automatic process in section – 74, SVB- EDD Refund, & DBK (AIR). But not happening

Daily duty allocation of customs officials (Exports & Imports)--The rostering can move to a system generated roster.

Drawback section of Customs at times asks for same export documents again . Should be done away with as leads to delay in availing drawbacks.


Mumbai Airport Waiting Time of 3-4 hours plus (in truck que and ramp que), due to Manual Ramp Operations and Lack of IT

Current Process: Presentation of physical Annexure C document, followed by manual entry of details into system, and assignment of Examining Officer (EO). This is followed by manual carting of export cargo into cargo terminal.

Suggested ChangesEDI submission of Annexure C information online with reference to HAWB and MAWB. RFID scan enabled entry registration process at terminal ramp. EO assigned automatically post-scanExport RMS allows segregation of shipments into those requiring physical examination and those not at the RFID scan stage. Carting into separate zones based on this segregationMechanical Carting: Mandating Terminal Operator in Major Airports to use ramp-carts


Reduction of Transaction Cost in Exports 1. CENTRAL

EXCISE2. CUSTOMS 3. PORT TRUST 4. DGFT

To Exempt from Excise Duty from

Factory

For Clearance of Goods

To Load Cargo in Vessel

To Collect Incentive/ Redemption

S. No.

Present Required Documents




1 B1 - Bond Export Invoice Export Invoice ANF

2 IEC Copy Packing List Packing List Chartered Engineer and CA Certification

3 RCMC Copy Shipping Bill Shipping Bill Copy BRC

4 PAN Copy (i) Exporter Copy Boat - Note EP Copy of Shipping Bill

5 IEM Copy (ii) Exchange Control Copy

RCMC

6 Export Order Copy (iii) Export Promotion Copy

7 CT - 1 Declaration

8 ARE - 1 Marine Insurance

Certificate of Origin


Documents Sufficient to carry out Transaction

1. CENTRAL EXCISE

2. CUSTOMS 3. PORT TRUST 4. DGFT

1 To be linked with EDI – Customs

Shipping Bill Boat Note not Required

EC - to be Compulsory - Online

2 B1-Bond, Export Order Copy, ARE-1

Declaration To be linked with EDI - Customs & DGFT

E-BRC

3

All other documents to be scanned and sent to Customs from Central Excise

Shipping Bill - To be linked with EDI - DGFT from Customs

4 To be linked with EDI – Central Excise & DGFT

RCMC - Not Required


Thank you

© confederation of indian industry task force on transaction cost airports: mumbai, delhi &...

Documents

cargo facility

cargo agent

cargo clearance

leather exporters

sea cargo

leather products

chennai slide

fragile cargo