Administrative reforms plan for customs soon

The Ministry of Finance MoF is working on a comprehensive administrative reforms package for customs which will be unveiled in the 2004-05...

The Ministry of Finance MoF is working on a comprehensive administrative reforms package for customs which will be unveiled in the 2004-05 Budget. The package will include release of goods in offence cases, licensing of Customs House Agents CHA for all-India operations and cheque payment of customs duty.

Ministry officials said the package will seek to streamline procedures for payment of customs. Many of the administrative reform measures form part of the Kelkar Committee on indirect taxes. In the next Budget, sources added, the government will try to complete the unfinished reforms agenda as suggested by the Kelkar Committee on the non-tariff side.

In the backdrop of the falling customs rate, one of the ways to increase customs duty collection is to improve administration, sources said. The government in the 2003-04 Budget reduced the peak rate of customs duty from 30 per cent to 25 per cent. Customs duty collection during the first half of the current fiscal went up to Rs 23,183 crore from Rs 21,445 crore in the corresponding period last year, registering a growth of slightly 8 per cent.

The Kelkar committee has suggested release of goods even in offence cases as a part of the trust based system developed along with intelligence and risk assessment techniques by the revenue department. Though in principle customs duty payment in cheque has been accepted, adequate safeguards which will be needed for the system are being examined by the government. Sources said the government will be able to put in place a proper cheque payment system with adequate safeguard by the beginning of the next fiscal.

As far as the policy on CHA is concerned, Ministry is drawing up a comprehensive policy for entry norms. The policy will include mandatory technical qualifications for all-India licences. This will entail conducting an all-India entrance examination for licensing of CHAs. This examination will be conducted by the Directorate General of Inspection, Central Board of Excise and Customs CBEC once a year at Delhi and its zonal units.

Giving all India licences for CHA operations is under active consideration of the government, sources said. The Kelkar committee had recommended that CHAs once licensed should be allowed to operate at any customs house, port, inland container depot located in any part of the country. However, this permission should be subject to simple registration of business premises with the jurisdictional commissioner of customs. CHA licences can be revoked if instances of misconduct and delay are brought to the notice of the customs department, the report had recommended.