Our vision and Strategy

Minimum pre-clearance scrutiny of import/export declarations and examination of goods.

Introduce systems assessment i.e. without any human intervention for specified 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.

Minimize 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 computerized database.

Move towards a single window clearance wherever possible

10.

Provide 24 hours or ‘extended time’ Customs clearance facility, wherever required.

11.

Implement the provisions of International Conventions on Customs techniques (revised Kyoto Convention).

12.

Examine all extant procedures and eliminate those not compatible with trade facilitation

13.

Undertake a continual review of Customs procedures so as to be responsive to changing situations.

CENTRAL EXCISE

Study all the existing Central Excise procedures, and streamline and simplify them, so that the assesses are encouraged to comply voluntarily

Evolve a new and comprehensive Central Excise law;

Adopt 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 and exporters

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.

ENCOURAGING VOLUNTARY COMPLIANCE

Compliance with tax laws is the shared responsibility of the taxpayer 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 interest 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 taxpayers by establishing Guidance units at various Customs and Excise formations.Such Guidance Centers would furnish information to the trade on issue 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 Audiovisual Media for dissemination of information.

Create a web site 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 Excise Commissionerate

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

CUSTOMS

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 Boarder Security Force and the Coast Guard.

At the International level too, cooperation with the World Customs Organization and the World Trade Organization to bring about greater harmonisation of Customs procedures and other trade related polices 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 of narcotics.

The initiatives identified in order to achieve these objectives are:-

a.	Establishing durable working partnership with Airlines, Shipping Lines, Custodians and other Agencies and Organisations involved in cargo clearance.
b.	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 filling of Manifests by the carriers, prior notice of arrival of goods to importers, for filling of goods declaration by Customs Agents, presentation of goods for examination by custodian, etc.)
c.	Co-operating with custodians at airports in setting up separate facilities for clearance of express consignment imported/exported through the courier mode.
d.	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.
e.	Evolving a uniform nomenclature based on the Harmonized system for levy of Customs and Excise duties, export and import trade policy and trade statistics.
f.	Instituting and operating formal consultative mechanism with Director General of Foreign Trade/Ministry of Commerce for introducing of making changes in export and import trade policies.
g.	Entering into Mutual Administrative Assistance Agreements with the Customs Administrations of other countries in terms of the Nairobi Convention.

CENTRAL EXCISE

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 tax evasion as well as for streamlining and for eliminating 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 initiative identified in this regard are:-

a.	Establishing a working partnership with other tax collecting departments.
b.	Entering into mutual administrative assistance agreement with other law enforcing agencies.
c.	Establishment of commercial data exchange mechanism with other agencies using the common Business Identified Number
d.	Development of common documentation system that satisfies the requirements of various trades related legislation.

ASSISTING IN THE FORMULATION OF TARIFF POLICIES

Since 1991, several steps have been taken to lower import tariffs and excise duty levels and also reduces dispersion in the duty rates.Exemption schemes have also been considerably rationalized.This is an ongoing process and to enable the Government to take well considered decisions on the tariff/duties levels as also other concessions, it is proposed to:-

a.	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.
b.	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 liberalization and reduction in tariffs, the problems of duty evasion through undervaluation, 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 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:-

CUSTOMS

Make better use of intelligence systems and emerging technologies
by refocusing on information sourcing and analysis.
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 enforcement activities.
by developing a new risk assessment system to ensure a better balance between resources and risk.

Strengthen the Directorate General of Revenue Intelligence so as to enhance its capability I tackling commercial frauds.

Strengthen the Directorate of Valuation to enable it to provide information and guidance to field formations on price-trends, commodities prone to under valuation, suspect imports and modus-operandi relating to valuation frauds.

CENTRAL EXCISE

Create a Directorate General of Audit to strengthen the audit set-up

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 Tax.

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.

MEASURING CONFIRMANCE TO SERVICE DELIVERY STANDARDS

In the context of liberalisation 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:

a.	Publication of Citizens’ Charter, setting out service standards.
b.	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.
c.	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.