Not break­ing the ‘cus­toms’ chain

CARGOTALK IN­DIAN CUS­TOMS BRO­KERS play a vi­tal role in fa­cil­i­tat­ing In­dia’s for­eign trade. ex­plores how cus­tom bro­kers are sig­nif­i­cant for the trade for safe­guard­ing their in­ter­est dur­ing chang­ing times.

Cargo Talk - - Front Page - KALPANA LOHUMI

Trade fa­cil­i­ta­tion lays em­pha­sis on the ef­fi­cient im­ple­men­ta­tion of trade rules and reg­u­la­tions and re­duces all the trans­ac­tion costs which are as­so­ci­ated with dif­fer­ent kinds of en­force­ment, reg­u­la­tion and trade poli­cies, as well as re­forms that are par­tic­u­larly framed to re­duce the costs in­volved in cross border move­ment of goods and ser­vices. Fol­low­ing the ap­proval of the Trade Fa­cil­i­ta­tion Agree­ment (TFA) of World Trade Or­gan­i­sa­tion (WTO) by In­dia in April 2016, a Na­tional Com­mit­tee on Trade Fa­cil­i­ta­tion (NCTF) un­der the Chair­man­ship of Cab­i­net Sec­re­tary has been con­sti­tuted. The TFA would ne­ces­si­tate sim­pli­fi­ca­tion of border man­age­ment pro­ce­dures and adop­tion of new trans­parency mea­sures, all of which are ex­pected to re­duce the trans­ac­tion cost of im­ports and ex­ports and fa­cil­i­tate smooth move­ment of goods across bor­ders. CARGOTALK brings to you the cus­toms bro­kers’ role in trade fa­cil­i­ta­tion.

Samir J Shah, Part­ner, JBS Group of Com­pa­nies states, “The In­dian cus­toms bro­ker is a very un­der­es­ti­mated and un­der re­spected pro­fes­sional. He is the most knowl­edge­able stake­holder in the en­tire ex-im change and the true link be­tween all the var­i­ous stake­hold­ers. The In­dian cus­toms bro­kers not only in­ter­act with all agen­cies on be­half of the ex-im trade but also ex­tend their ser­vices to re­solve is­sues with for­eign con­sulates. The In­dian Cus­toms Bro­ker has played a very

The In­dian cus­toms bro­kers not only in­ter­act with all agen­cies on be­half of the ex-im trade but also ex­tend their ser­vices to re­solve is­sues with for­eign con­sulates

The In­dian cus­toms bro­ker is adapt­able and ag­ile. All those who can recog­nise the ba­sic changes would sur­vive the present tu­mul­tuous times Hu­man in­ter­ac­tion and in­ter­ven­tion is com­ing down and hence all is­sues have to be ad­dressed with the help of tech­nol­ogy

cru­cial role in TFA pro­mo­tion. A very ac­tive di­a­logue with many gov­ern­ment agen­cies is a very pas­sion­ate ac­tiv­ity of the In­dian Cus­toms Bro­ker.” Sudip Dey, Vice Pres­i­dent, Cal­cutta Cus­toms House Agents’ As­so­ci­a­tion & Vice Chair­man, FFFAI, says, “In­dian cus­toms bro­ker thinks more on be­half of the ex-im trade than them­selves. Most of the is­sues we rep­re­sent, seeks to make the life of the im­porter/ ex­porter eas­ier. In fact, most of the fa­cil­i­ta­tion mea­sures that the gov­ern­ment is com­ing up with has been re­ceived from the cus­toms bro­ker fra­ter­nity only.” Shar­ing the con­tri­bu­tion of cus­tom bro­kers in trade fa­cil­i­ta­tion, Harpreet

Singh Mal­ho­tra, CMD, Tiger Lo­gis­tics, says, “The plumb­ing of in­ter­na­tional trade by im­ple­ment­ing ef­fi­cient trade rules and reg­u­la­tions in a ma­jor way was com­pleted by cus­toms bro­kers in In­dia. This con­tri­bu­tion could be un­der­stood well as a re­sult in an over­all im­prove­ment of trade per­for­mance of our coun­try by the help of trade in­fra­struc­ture. This also com­ple­ments over­all trade pro­mo­tion and refers to re­duc­ing all the trans­ac­tion costs which are as­so­ci­ated with dif­fer­ent kinds of en­force­ments. Ac­cord­ing to S Ra­makr­ishna, Di­rec­tor, Balaji Mar­i­line, “There are no ser­vice providers who have bet­ter un­der­stand­ing on the sub­ject of ex-im trade in terms of poli­cies and pro­ce­dure of com­merce and in­dus­try, tax­a­tion in­clud­ing GST, E way bills and its rules, apart from the re­quire­ment of var­i­ous al­lied agen­cies.” “Cus­toms bro­kers make bor­ders work,” be­lieves, San­jam Sahi Gupta, Di­rec­tor, Si­tara Ship­ping. “By man­ag­ing data, re­la­tion­ships and com­plex­ity, cus­toms bro­kers plus cus­toms mod­erni­sa­tion di­rectly sup­ports trade fa­cil­i­ta­tion,” she adds.

Ra­jesh Verma, Di­rec­tor, AR Ship­ping, tells, “Cus­toms Bro­kers act as in­ter­me­di­aries be­tween ex-im trade and cus­toms in the clear­ance process of goods. They are the pro­fes­sion­als who with broad knowl­edge of cus­toms law, cus­toms tar­iff classification, cus­toms tar­iff sched­ule, ex-im pol­icy, al­lied acts, ship­ping knowl­edge han­dles not only the doc­u­men­ta­tion but also co­or­di­nates with dif­fer­ent par­tic­i­pa­tive gov­ern­ment agen­cies and cus­to­di­ans for smooth and trou­ble-free clear­ance of goods. When In­dia has gone for the big­gest change in tax sys­tem

and en­tered the GST regime, it was the cus­toms bro­kers fra­ter­nity which was first point to han­dle doc­u­men­ta­tion for cus­toms clear­ance with all rel­e­vant GST pro­vi­sions. Cus­toms bro­kers pro­fes­sional han­dling of cus­toms clear­ance in re­quired time frame helped In­dian ex­porters and im­porters to meet their de­liv­ery schedules.” Road­blocks & gov­ern­ment par­tic­i­pa­tion Com­ment­ing on the chal­lenges that need to be ad­dressed ei­ther by gov­ern­ment or in­dus­try stake­hold­ers, Mal­ho­tra no­ti­fies, “In In­dia, a plethora of is­sues re­lated to trade fa­cil­i­ta­tion con­tin­ues to per­sist, even as the gov­ern­ment has been in­tro­duc­ing re­forms for last sev­eral years. This is ev­i­dent from a num­ber of re­ports and stud­ies that high­light the large scope of im­prove­ment for In­dia in trade fa­cil­i­ta­tion. The in­te­gra­tion of the do­mes­tic econ­omy through the twin chan­nels of trade and cap­i­tal flows has ac­cel­er­ated in the past two decades which in turn led to the In­dian econ­omy grow­ing from ` 32 tril­lion (US$ 474.37 bil­lion) in 2004 to about ` 153 tril­lion (US$ 2.3 tril­lion) by 2016. Si­mul­ta­ne­ously, the per capita in­come also nearly tre­bled dur­ing these years. In­dia’s trade and ex­ter­nal sec­tor had a sig­nif­i­cant im­pact on the GDP growth as well as ex­pan­sion in per capita in­come.” On the other hand, Dey be­lieves, “The in­dus­try should put their heads into try­ing to fig­ure out why the cus­toms clear­ance process is tak­ing more than 10 days when it can be done within two days. It has been seen that most of the time the cargo is pend­ing in the hands of other stake­hold­ers like im­porter, port, CFS & ship­ping lines. Here, the im­prove­ment is vi­tal.” Ac­cord­ing to Shah, qual­ity of the soft­ware and the con­nec­tiv­ity is­sues and mind­set changes with ca­pac­ity build­ing would be the top chal­lenges. “How­ever, the gov­ern­ment is work­ing on many is­sues and most of them would change the ba­sic as­sump­tion on which we have acted over the last six decades,” he adds. Adding to this, Verma says, “At this junc­ture with on­go­ing cus­toms re­forms, cus­toms bro­kers are re­quired to adopt more com­pre­hen­sive and ad­vi­sory role, rather than lim­it­ing them­selves to merely fil­ing doc­u­ments for cus­toms clear­ance. In the past year, gov­ern­ment has very strongly shown their in­tent of bring­ing ‘ease of do­ing’ in busi­ness and de­pend­ing more on strength­en­ing their EDI sys­tem by in­tro­duc­ing Dig­i­tal Sig­na­tures for users for fil­ing doc­u­ments, adopt­ing SWIFT i.e. Sin­gle Win­dow in­ter­face for par­tic­i­pa­tive gov­ern­ment agen­cies, use of RFID seals for self­sealed con­tain­ers, and now eSan­chit pro­gramme for fil­ing of doc­u­ments

When In­dia had en­tered the GST regime, it was the cus­toms bro­kers fra­ter­nity who were first point to han­dle doc­u­men­ta­tion for cus­toms clear­ance with GST pro­vi­sions The plumb­ing of in­ter­na­tional trade by im­ple­ment­ing ef­fi­cient trade rules and reg­u­la­tions in a ma­jor way com­pleted by cus­toms bro­kers in In­dia

with PDF at­tach­ments and re­plac­ing the pa­per doc­u­ments. The chal­lenge for the gov­ern­ment is to train their own field for­ma­tions to adopt these pro­grammes faster though cus­toms bro­kers were al­ways quick to up­grade them­selves as re­quired. The helpdesks of ICEGATE still need to respond quicker and in much bet­ter way. Other most im­por­tant chal­lenge is faster con­nec­tiv­ity to gate­way ports with hin­ter­land ICDs though more and more op­er­a­tors are be­com­ing op­er­a­tional but as the ex­ports are stag­nant and not grow­ing as per gov­ern­ment plans and tar­get, the pres­ence of more lo­gis­tics play­ers is only re­sult­ing in more time to con­nect to gate­way ports be­cause they are not able to com­plete their re­quired loads to move trains.” “The only chal­lenge is that Min­istries other than the Fi­nance and Com­merce is not in sync with the cus­toms. EPR is the big­gest chal­lenge to­day, apart from BIS where the pri­mary prod­uct does not re­quire BIS, how­ever at­tach­ments for ex­am­ple adapter are be­ing in­sisted upon though it is in­cor­rect,” high­lights Ra­makr­ishna. Ex­press­ing con­tent­ment from gov­ern­ment side, Dey says, “The gov­ern­ment is all out in trade fa­cil­i­ta­tion as a pol­icy as per their com­mit­ment to WTO. How­ever, this mes­sage has not been fully em­bed­ded in the minds of the field for­ma­tions.” “The trade fa­cil­i­ta­tion im­ple­men­ta­tion in In­dia has been a good sym­phony be­tween the bu­reau­cracy; the leg­is­la­ture and the pri­vate sec­tor. This is the first time I have no­ticed that all the three are work­ing at the same pace with the bu­reau­cracy lead­ing the change,” adds Shah. “Reg­u­lar trade fa­cil­i­ta­tion meet­ings at all Com­mis­sion­er­ate’s are tak­ing place and all de­lib­er­a­tions are taken pos­i­tively and nec­es­sary steps are taken to re­solve the is­sues, if any. More and more steps taken by gov­ern­ment on re­ly­ing and strength­en­ing EDI sys­tem shows the se­ri­ous­ness of gov­ern­ment for rais­ing level of ‘ease of do­ing’ busi­ness,” Verma added. “The gov­ern­ment of the coun­try has at the high­est level have re­dres­sal com­mit­tees in­clud­ing Na­tional com­mit­tee on trade fa­cil­i­ta­tion headed by Cab­i­net Sec­re­tary to Com­mis­sion­ers level at var­i­ous cus­tom for­ma­tion. The Cus­tom for­ma­tion level meet­ing is also sent to the board where based on the ob­ser­va­tions good mea­sures have been im­ple­mented. One of the best ex­am­ple is the GST re­fund for the ex­porters. The re­fund process were de­layed due to mis­takes which hap­pened at the ex­porters end were re­solved by the gov­ern­ment.” in­forms Ra­makr­ishna.

Fu­ture of cus­toms bro­kers

“The In­dian cus­toms bro­ker is adapt­able and ag­ile. All those who can recog­nise the ba­sic changes would sur­vive the present tu­mul­tuous times. It is a time for new di­men­sions and a readi­ness to adapt and ac­cept what seemed im­pos­si­ble a few years ago,” em­pha­sises Shah. “When you are deal­ing in the busi­ness of im­port and ex­port, you cer­tainly have to make sure that the goods that you are im­port­ing over­seas do not fail to con­form to all the terms and con­di­tions of in­ter­na­tional trans­porta­tion of sup­plies. It is manda­tory for you to fill many forms, in due course, that val­i­date the re­quired certifications in­clud­ing san­i­tary cer­tifi­cate, per­mits, etc. You can­not han­dle all these for­mal­i­ties com­pletely on your own. So here the role of a pro­fes­sional cus­toms bro­ker comes into play. And to ease your­self from all these bur­dens, you surely need to take help of cus­toms bro­kers who is much more thor­ough than you with all the rules and reg­u­la­tions of ex-im,” shares Mal­ho­tra. “The tra­di­tional role of cus­toms bro­kers and freight for­warders is be­ing re­vamped to cater to the re­quire­ments of com­plete lo­gis­tics ser­vices. In­dia is aim­ing to in­crease its share in global trade and ex­ports through var­i­ous ini­tia­tives like, ‘ease of do­ing busi­ness’, hence, the role of the cus­toms bro­ker can­not be ig­nored. They play a vi­tal role in the suc­cess of pro­grammes such as ‘Sin­gle Win­dow Clear­ances’ ‘Dig­i­tal In­dia’,” opines Gupta. “The cus­toms bro­ker has huge and very op­ti­mistic scope in In­dia and with fast chang­ing gov­ern­ment poli­cies; trade re­quires the well in­formed cus­tom bro­kers to han­dle their busi­ness. The sys­tem is be­com­ing more trans­par­ent and ex-im trade can see the pro­cess­ing of their doc­u­ments sit­ting in their of­fices,” adds Verma. “How­ever, cus­toms bro­kers have to be tech savvy. Hu­man in­ter­ac­tion and in­ter­ven­tion is com­ing down and hence all is­sues have to be ad­dressed with the help of tech­nol­ogy. There­fore, those who do not use tech­nol­ogy they shall not be able to give sat­is­fac­tory ser­vice to their clients,” points Dey.

San­jam Sahi Gupta Di­rec­tor Si­tara Ship­ping Cus­toms bro­kers make bor­ders work. By man­ag­ing data, re­la­tion­ships and com­plex­ity, cus­toms bro­kers plus cus­toms mod­erni­sa­tion di­rectly sup­ports trade fa­cil­i­ta­tion S Ra­makr­ishna Di­rec­tor Balaji Mar­i­line There are no ser­vice providers who have bet­ter un­der­stand­ing on the sub­ject of ex-im trade in terms of poli­cies and pro­ce­dure of com­merce and in­dus­try, tax­a­tion, E way bills and its rules

Sudip Dey Vice Pres­i­dent, Cal­cutta Cus­toms House Agents’ As­so­ci­a­tion & Vice Chair­man, FFFAI

Samir J Shah DDP Game Changer 2017 & Part­ner JBS Group of Com­pa­nies

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