Customs throttle containers

New Delhi, Oct 24: Threatened by the loss in their business due to the increased presence of inland container depots ICDs and container...

New Delhi, Oct 24: Threatened by the loss in their business due to the increased presence of inland container depots ICDs and container freight stations CFS, the Chief Commissioner of Customs of Mumbai has now decided to throttle the competition. To do this, the Chief Commissioner issued a notification Public Notice No 93/99 on August 17, effecting a radical change in the manner in which container business is to run 8212; that this will effectively kill the inland container business is another matter.

The main reason for this is the loss in customs revenue for the Mumbai customs. With more and more importers preferring to clear their goods in container depots closer to their business location, and to avoid the delays and demurrage that plague over-stretched ports like Mumbai, the import duty on the consignments is then paid in, say, the Tughlakabad or Faridabad or Patparganj inland container depots. While this customs duty does accrue to the Central government, it then falls under the Tughlakabad orFaridabad or Delhi tax circle and not the Mumbai one. But since the Mumbai customs are concerned with only their own targets, and are under pressure to increase collection, they8217;ve struck back.

Under the new rules, which become effective next month, all importers consignees will have to submit a copy of their purchase invoice to the shipping lines8217; agents office at the port of entry Mumbai three working days prior to the arrival of the vessel 8212; the lines will, in turn, submit them to the Mumbai customs authorities. Normally, these documents are furnished by the consignees at the inland container terminal or the container freight station when they clear the goods. The whole idea is to avoid having to deal with the Mumbai port as it just delays matters.

The Container Shipping Lines Association and the Mumbai and Nhava-Sheva Ship-Intermodal Agents Association have issued an advertisement in EXIM India saying that they will stop moving containers to the inland container depots/container freightstations unless the individual importers comply with this formality.

And since the usual practice is to utilise the same containers brought in for imports to then carry out the export cargo, any dislocation in import cargo containers will imply that there will be a tremendous shortage in containers for exports as well. The Mumbai customs have justified this new procedure on the grounds that it is necessary for continuity of the cargo bond, and that it helps them know the value of cargo which will be moving by surface transport to the ICD/CFS. The point, however, is that the continuity of cargo bonds is something that is done on a rotating basis between the customs and the ICD/CFS on the basis of the receipt of landing certificates when the containers arrive at their final destination.

In any case, the invoice is a contract between the consignor Exporter and the consignee importer and is subject to scrutiny by the customs only at the ports of loading and discharge, and never anywhereelse.

Interestingly, while container traffic has been moving to inland container depots and container freight stations for more than a decade, this situation has arisen only now, when the Mumbai customs are facing increased pressure for increasing their import duty collections.