Importers may get shipments quicker face low penalties

Importers may get their shipments quicker and face lower penalties if they own up to breaches, under a government action plan to smoothen cross-border trade.

The Central Board of Indirect Taxes and Customs (CBIC) on Friday released the National Trade Facilitation Action Plan to reduce red tape under three heads—legislative, administrative and technology-related changes. The idea is to reduce cost and time involved in cross-border trade, make the legal regime more predictable and improve the ease of doing business. The efforts are also part of India’s commitments under a World Trade Organization deal on trade facilitation.

One key target is to reduce cargo release time to 12 hours for outbound air cargo and 24 hours for outbound sea cargo. The target is 48 hours for inbound sea cargo and 24 hours for inbound air cargo. This, CBIC expects, will improve the investment climate in the country.

The CBIC plan proposes provisions for voluntary disclosure of violations and penalty mitigation, release of shipments prior to final determination of the customs duty and restricting introduction of new pre-shipment inspection requirements. During the pandemic, the customs department took several steps to reduce paperwork and eliminate physical interface between merchants and officials. Cutting red tape and making cross-border trade simpler is a priority for the Narendra Modi administration, as it is flagged by the World Bank as one of the key determinants of the ease with which business could be done in a country.

India has been consistently working on improving its global ranking in ease of doing business. The World Bank’s Doing Business 2020 report had pointed out that India’s reform efforts targeted all the areas measured in the ranking, with a focus on areas such as paying taxes, trading across borders and resolving insolvency. India has made “a substantial leap upward” by improving its position from 130 in the Doing Business 2016 ranking to 63 in Doing Business 2020, as per the World Bank report. The goal of the latest trade facilitation action plan is to help improve India’s position to the top 50. World Bank’s ‘trading across borders’ indicator measures the time and cost associated with the logistics of export and import and covers documentary compliance.