To achieve our mission, we would focus on-
Enhancing the use of Information Technology
- Enhancing the use of Information Technology
- Streamlining Customs and Excise procedures
- Encouraging voluntary compliance
- Evolving cooperative initiatives
- Assisting in the formulation of Tariff Policies
- Combating revenue evasion, commercial frauds and social menace
- Measuring conformance to service delivery standards
- Developing professionalism and responsibility
The use of information Technology has brought about a revolution
in the manner in which business operations are carried out throughout
the world. More and more operations are being carried out 'on-line',
reducing the time taken and taking the world towards 'paperless'
operations. Thus use of 'Electronic Data Interchange'(EDI) has come
to be accepted widely as the means of interface between business
partners as also Government agencies.
Indian Customs is also committed to adopt this new deal so as
to attain global standards in speeding up flow of goods, thereby
reducing the turn-around and inventory carrying costs, imparting
vital competitive edge to the Indian trade and industry.
Building on the success of the pilot EDI project at Delhi Air
Cargo, we could seek to promote electronic commerce and facilitate
expeditious clearance of cargo through the following measures:
Similarly, we envisage the following measures for enhancing the
use of information technology in our excise operations:
- Automated processing of import and export entries and cargo
declarations, with least paper work and human intervention,
at the sea ports, airports, inland container depots, container
freight stations and land border stations.
- Enabling EDI with businesses, shipping lines, airlines, carriers,
customs agents, custodians and other agencies concerned with
cargo clearance and international trade.
- Providing access to customs electronic infrastructure to enable
business partners to obtain information required by them for
- Computerisation of all the other Customs operations
and management activities to provide better services to our
clients and enhance our performance.
- Receipt and processing of excise assessment returns electronically,
through EDI, Internet and other means.
- Enabling the assessees to maintain computerised records, issue
computer generated invoices and file returns electronically.
- Having an automated 'returns' processing system to assist
assessment and audit functions.
- Building a Management Information System to assist policy
making, monitoring of revenue trends and combating duty evasion
by developing assessee profiles.
Encouraging Voluntary Compliance
Compliance with tax laws is the shared responsibility of the tax
payer and the tax collector. Nevertheless, a tax system can be effective
only if it can systematically obtain voluntary compliance of the tax
laws by the assessees. To encourage voluntary compliance, the tariff
levels should be moderate, the procedures simple, and the cost burden
of compliance minimal. There should be certainty about the assessments
made and duty liability so as to eliminate retroactive burdens on
the assessees. Further, we believe mutual trust should be the foundation
on which the relationship between us and our clients are built.
To Win business confidence and create a climate for voluntary compliance,
we would institute the following measures:
- Prior consultation with concerned trade interests and field formations
before introducing changes in laws and procedures.
- Having a system of advance rulings on classification and valuation
of goods and the applicability of specific duty exemption schemes.
- Improving the quality of service and providing information to
the trade and the tax payers by establishing Guidance units at various
Customs and Excise formations. Such Guidance Centres would furnish
information to the trade on issues of specific interest and also
provide general information regarding laws and procedures, and the
admissibility of benefits under various exemption schemes.
- Make more effective use of Seminars 'Open Houses', Publicity materials,
and Audio Visual Media for dissemination of information.
- Create a Website for CBEC on the Internet and make available copies
of Notifications and Circulars on line for faster communication
of information to Trade and field offices. Also provide Inter-Active
Telephone Help Lines.
- Restructure the existing Grievance Redressal Machinery by setting
up an independent ombudsman at each Customs Station and Central
- Evolve a common business identification number in place of separate
identifiers being issued for Customs, Central Excise, Income Tax
and Foreign Trade (DGFT) purposes.
Evolving Cooperative Initiatives
In the sphere of facilitation and regulation of
International trade several agencies apart from Customs,
have a role to play. We believe that trade with other countries can
be enhanced only when these
agencies act in concert and mutual cooperation. Similarly, in the
area of border control we recognise the role of the Border Security
Force and the Coast Guard.
At the International level too, cooperation with
the World Customs Organisation and the World Trade Organisation to
bring about greater harmonisation of Customs procedures and other
trade related policies is identified as a clear need. Another area
where cooperation amongst various countries involved in International
Trade is called for is combating commercial frauds and smuggling or
The initiatives identified in order to achieve
these objectives are:
Streamlining Customs and Excise Procedures
- Establishing durable working partnership with Airlines, Shipping
Lines, Custodians and other Agencies and Organisations involved
in cargo clearance.
- Evolving minimum standards through mutual consultations with various
Agencies to reduce delays in the release of Import/Export Cargo
(such as standards for time taken for filing of Manifests by the
carriers, prior notice of arrival of goods to importers, for filing
of goods declaration by Customs Agents, presentation of goods for
examinations by the custodian, etc.).
- Co-operating with custodians at airports in setting up separate
facilities for clearance of express consignments imported/exported
through the courier mode.
- Co-operating with State Governments and other concerned agencies
in developing and improving the infrastructure facilities for clearance
of cargo at land Customs stations and other inland locations.
- Evolving a uniform nomenclature based on the Harmonised system
for levy of Customs and Excise duties, export and import trade policy
and trade statistics.
- Instituting and operating formal consultative mechanism with Director
General of Foreign Trade/Ministry of Commerce for introducing or
making changes in export and import trade policies.
- Entering into Mutual Administrative Assistance Agreements with
the Customs Administrations of other countries in terms of the Nairobi
Customs and Central Excise procedures are perceived by the trade
as cumbersome involving time consuming documentation, scrutiny and
physical examination of goods, divergent practices and a high degree
of individual discretion, resulting in impediments to the smooth
movement of trade and acting against the interests of genuine importers,
exporters and manufacturers. Appreciating this concern we are committed
to streamlining and simplifying the procedure and setting a climate
for voluntary compliance. The introduction of electronic processing
of documents also entails a change in approach and re-engineering
of Customs and Central Excise Processes based on selectivity, risk
assessment and reduced intervention.
We envisage the following measures to achieve this objective:
- Minimise pre-clearance scrutiny of import/export declarations
and examination of goods.
- Introduce systems assessment i.e. without any human intervention
commodities/identified importers and exporters.
- Introduce audit-based post-clearance scrutiny for identified importers/exporters,
industry groups. Combine post-clearance audit for Customs and Central
Excise in respect of manufacturer-importers/exporters wherever possible.
- Accept periodic declarations instead of individual declarations
for each consignment for identified importers/exporters.
- Introduce a system of deferred duty payment for identified assessees
subject to revenue safeguards.
- Minimise physical examination of goods by effectively using 'risk
assessment' based targeting techniques.
- Introduce a system of release of goods even where the documentation
is incomplete or there has been contravention of Customs laws, subject
to adequate safeguards.
- Eliminate divergent practices in the application of Customs laws
and procedures at different Customs stations by effective monitoring
and analysis of the computerised database.
- Move towards a single window clearance wherever possible.
- Provide 24 hours or 'extended time' Customs clearance facility,
- Implement the provisions of International Conventions on Customs
techniques ( Revised Kyoto Convention).
- Examine all extant procedures and eliminate those not compatible
with trade facilitation.
- Undertake a continual review of Customs procedures so as to be
responsive to changing situations.
Study all the existing Central Excise procedures, and streamline
and simplify them, so that the assesses are encouraged to comply
Evolve a new and comprehensive Central Excise Law.
Adept unified Modvat rules for inputs and capital goods.
Move towards a system of periodical payment of duties by assessees.
Replace physical checks with selective audit.
Accept records maintained under Companies Act for the purpose
of administration of Central Excise laws in lieu of statutory records.
Evolve simplified schemes for refunds and rebates due to manufacturers
Eliminate divergent practices in the application of Excise laws
and procedures at different formations
by effective monitoring and analysis of the computerised database.
Undertake a continual review of Excise procedures so as to be
responsive to the changing situations.
As in the area of 'international trade', cooperation amongst various
agencies concerned with domestic industry and trade is a clear need
for effective monitoring of the trade pattern and for trade facilitation.
The Income Tax Department, Sales Tax Department, the local Octroi
Authorities, Police and the Department of Industries possess information
useful for the Excise Department. This information can be effectively
utilised for combating duplication of documentation and database.
Common documents can be evolved to satisfy the requirements of various
tax laws and also reducing the burden of reporting by the trade and
industry to various agencies.
The initiatives identified in this regard are:
- Establishing a working partnership with other tax collecting departments.
- Entering into mutual administrative assistance agreement with
other law enforcing agencies.
- Establishing of commercial data exchange mechanism with other
law agencies using the common
Business Identification Number.
- Development of common documentation system that satisfies the
requirements of various trade
Assisting in the formulation of
Since 1991, several steps have been taken to lower import tariffs
and excise duty levels and also reduce dispersion in the duty rates.
Exemption schemes have also been considerably rationalised. This is
an on going process and to enable the Government to take well considered
decisions on the tariff/duties levels as also other concessions, it
is proposed to:
- Undertake continual review of import tariffs and excise duty rates,
keeping in view our international commitments (WTO bindings, if
any) and their impact on domestic production.
- Conduct specific sectoral/commodity studies for imposing safeguard
duties, anti-dumping duties and the like, so that domestic industry
is able to raise its competitiveness.
Combating Revenue Evasion, Commercial
Frauds and Social Menace Effectively
Despite the trade liberalisation and reduction in tariffs, the problems
of duty evasion through underevaluation, misdeclaration, misuse of
duty exemption schemes and other violations of laws including drug
trafficking would need to be addressed. There are still substantial
monetary advantages to encourage the ever growing number of economic
offenders to circumvent law. The modus-operandi of smuggling has also
undergone significant changes in step with the changing economic scenario
and the growing ingenuity of the operators.
We propose the following measures to combat revenue evasion, commercial
frauds and social menace effectively:
1. Make better use of
intelligence systems and emerging technologies:
- by refocusing on information sourcing and analysis.
- by enhancing our strategic assessment of threats from smuggling
and risk prone commodities.
- by improving the balance between central and local risk assessments
across all businesses.
- by developing and maintaining links with international agencies
on intelligence, investigation and
- by developing a new risk assessment system to ensure a better balance
between resources and
2. Strengthen the Directorate
General of Revenue Intelligence so as to enhance its capability in
tackling commercial frauds.
3. Strengthen the Directorate
of Valuation to enable it to provide information and guidance to field
formations on price-trends, commodities prone to undervaluation, suspect
modus-operandi relating to valuation frauds.
- Create a Directorate General of Audit to strengthen the audit
- Develop a professional audit programme by utilising modern audit
techniques including a Computer Assisted Audit Programme(CAAP) based
on risk analysis.
- Develop an Audit Programme for the administration of the Service
- Create a detailed and effective database on tax compliance for
targeting 'high risk' and 'low risk' areas.
- Strengthen the Directorate General of Anti-evasion so as to enhance
its capability in tackling commercial frauds.
- Tackle the Modvat and valuation frauds effectively by utilising
the services of professional Chartered Accountants and Cost Accountants.
Conformance to service delivery standards
In the context of liberisation of trade, the service delivery levels
of the Customs and Excise Administrations have to be substantially
enhanced. It is accordingly proposed to first develop the standards
for delivery of service to the trading community; then evaluate performance
of Administration to bring about accountability. To improve the service
delivery standards, the initiatives we have in mind are:
- Publication of Citizen's Charter, setting out service standards.
- Undertaking a survey of satisfaction levels of travelling public
passing through Customs at various Ports, Airports and other border
stations; also conduct survey of satisfaction levels of businesses,
industry and individuals involved in manufacture and clearance of
goods and institute measures to improve service delivery conformance.
- Undertake on on-going-basis an assessment of the degree of conformance
to standards and publish periodical reports for the information
of the trading community.
Developing Professionalism and
Any system is as perfect as the human being behind it. It is therefore,
necessary that an important state holder is our realising the vision
of the organisation, namely our employees are motivated to deliver
their best. We believe that it is not merely enough that they are
trained in Customs and Excise procedures; they should be infused with
the positive attitude, empathy and an innate urge to help realise
the desiderate of a responsive Government. We envisage the following
measures to bring about greater professionalism in our approach and
also raise the efficiency and effectiveness of our work force:
- Enhancing professionalism, skills and technical knowledge, so
that the officials are adequately informed about their work and
are ready to meet the expectations of those with whom they deal.
- Providing quality training to all supervisory and managerial level
officers in management techniques, inter-personal relations, communication
skill, conflict resolution, stress management, attitude building
and crisis management.
- Ensuring the highest level of integrity and Professional Standards
within the service.