Air cargo goes ‘Turant’
The industry has been crying hoarse about the ease in customs clearance for a very long time. And now, with the government announcement of implementing faceless assessment of cargo in the next few months in India, there is a possibility of bringing in accountability and transparency in the business. attempts to assess to what extent the process will be faceless and how it will affect the employment quotient.
From the time that a shipment leaves the vendor till the time that it reaches the distributor, the process is not an easy one. Ask any operator about the issues pertaining to the operation of the customs department and he will recite a litany of woes. From delay in processing export cargo out of the cargo terminal and identifying export packages meant for examination, to the cumbersome transshipment process, the hurdles are abundant.
However, it sure seems like it’s time to rejoice! In a bid to enter the 50th ranking in World Bank’s Ease of Doing Business (EoDB) Index, the customs department is set to implement faceless assessment of cargo in the next few months. Central Board of Excise Duty has issued a circular regarding the launch of virtual assessment of the cargo under the ‘Turant custom scheme’. Under this scheme, the specialised custom houses based in every country can perform the task irrespective of where they file the bill. The assessment will no longer be required to be done at the place of filing of Bill of Entry. digs deeper into how this scheme can ease the customs-clearing process for import and export of goods, and how much of a bearing will it have on the employment rate of the sector.
Sunil Arora, President, ACAAI, calls it a dream come true situation for the industry as it had been pending for long, “Some trials on faceless assessment have been very successful and hopefully, this will be launched as a mandatory module at all custom ports. Faceless assessment will be a major leap towards transparency and accountability in the sector of governance. It will also ensure speed and accuracy.”
Calling it a major step to ensure a corruption-free governance and a serious initiative taken by the Ministry of Finance (MoF) and Ministry of Commerce (MoC), he says, “The export or import documents will be assessed by those who possess knowledge about the respective chapter or commodity and can understand the genuineness of the transaction. For example, in case of IT-related imports, an expert sitting in any part of the country or in an IT Exim zone will assess the product on the basis of all information available electronically, without meeting the agent, broker or the importer/ exporter physically.”
According to S Ramakrishna, President, Delhi Customs Brokers’ Association (DCBA), faceless assessment is a great move by the government but it would predominantly be for imports. “It is presumed that the officers who would be handling the documents would be experts in the Harmonised System Nomenclature (HSN) where the goods are being assessed. It is also presumed that there will be universal valuation,” he says.
Samir J Shah, Partner, JBS Group of Companies, welcomes the initiative and expects it to expedite processes, “The ability of the customs broker to work without personal interaction and the response from the customs will need some time for synchronisation. But, once that is in place, we will get to see the difference.”
Jaideep Raha, Regional Chairman (Eastern Region), ACAAI, opines that this system is at a very nascent stage. He adds, “One needs to see to what extent the process is faceless. Things are fine till anyone
Faceless assessment will be a major leap towards transparency and accountability in the sector of governance
files S/B or BoE online, generates checklist, generates queries and uploads on E-Sanchit portal. The most critical stage is to figure out whether the concerned customs officer still makes a fat file of papers and moves the file to his senior officers physically, or will that be done electronically? If in the real sense, we do implement a faceless assessment system like the one that is in place in Europe/ US or in the Far East, then will it benefit the trade to a great extent.”
SAVING TIME & MONEY
With everyone counting the advantages, the most important thing to note is whether through this one can save on time and cost. Adding to this, Arora says, “Digital interface is the most important tool for overall development. In case of supply chain management, faceless assessment will also help in reducing dwell time significantly along with transaction cost. We might face certain delays at the onset, but it will gradually move to being a smooth and faster mode of assessment which can also be termed as ‘minimum government and maximum governance’. With this, a regulator will become a facilitator in the true sense.”
Ramakrishna also resonates the saving of time and cost advantage. “If everything will be through the system, then time and cost saving should be apparent. There would be no need for a deputed personnel for assessment. As of now, there are many hitches which are all being addressed both by the trade and the government,” he says.
Not just the saving of cost and time, Raha says that this will also help in making the process transparent and secured. He explains, “In the event of any irregularity, either by CHA or by the customs officer, one can very easily pinpoint who is at fault. Secondly, these systems will be cloud-based and can easily extricate old files for ready reference. It has been a practice that at a drop of a hat, the CHA is blamed for anything that goes wrong and his licence is suspended instantly, whereas the importer or exporter as well as the customs officer involved goes practically scot free. This practice will stop and transparency will improve.”
Since it is a new mode, Shah says it will be difficult to estimate the saving on cost and time, however, he hopes that it will be in line with the desires of the EXIM trade and service providers. He is confident that the new system will bring in standardisation in the process.
If everything is through the system, time and cost saving should be apparent; there would be no need for a deputed personnel for assessment
“Presently, different customs houses follow different patterns within the legal framework. This won’t carry on for a long time. It may be a disturbing
intervening period, but will bring in much more compliance from all stakeholders. It would take away the human angle and the readings of the department to facilitate in case of genuine needs,” Shah says.
Digital empowerment is the backbone of any economy, and with this, India will be on a par with many of its international counterparts. Arora says, “With faceless assessment of cargo, Foreign Direct investment (FDI) will increase. Many multinational manufacturing companies will once again venture to set up their production hubs in India. The same way in which we say ‘money saved is money earned’, it applies to time as well. Time saved is time earned to grow more.”
LOSS OF EMPLOYMENT, A CONCERN?
Surely, the move has won a thumbs up from the industry, but with technology coming in and everything going digital, what about the loss of human employment? Not too confident about the loss of human employment, Ramakrishna comments, “We did have a similar apprehension when the EDI started in 90s. As a matter of fact, employment in EDI has increased. If the government runs the process flawlessly and the officers do a diligent job, the EXIM trade won’t see any change. The only disadvantage we see is that the HSN are predetermined with the location which defeats the process of being faceless.”
Sharing his concerns, Shah adds, “Loss of enterprise is a possibility and with it, loss of employment. There will be a need for largescale up-skilling and the staff will have to be ready for different job roles. Customs clearance from the field will shift to the office and usage of English will increase
It would take away the human angle and the readings of the department to facilitate in case of genuine needs
In the event of any irregularity, either by CHA or by the customs officer, one can very easily pinpoint who is at fault
which may pose a challenge to the existing workforce.”
However, Raha begs to differ. He strongly feels that all we need to do is to train the same staff in system technology and use them effectively,
“The impact will be very temporary and I firmly believe that once our economy touches US$ 5 trillion, it is clear and evident that the EXIM volume will go up and so will our business volumes, then we don’t need to hire extra staff and this will give us more productivity yield.”
In all this uncertainty and fear, there is surely a ray of hope. However, time alone will tell.