Manufacturers of the Electronics and Mobile Phones are seeking to get an exemption from the new “faceless assessment” system for clearing of their Import/Export shipments, as they are saying that this system has increased the processing time up to 8 to 12 days from an earlier time of 2 to 3 days.
The India Cellular and Electronics Association (ICEA) has sent a letter to the Central Board of Indirect Taxes & Customs (CBIC) on September 4, 2020, in which they have requested to CBIC, “We request all AEO (authorized economic operator) and In-Bond Manufacturing entities import/export be permitted “green channel” for self-assessment and automatic clearing for both import and export shipments to promote faster capacity addition and greatly improve ease of doing business.”
ICEA represents most global and Indian manufacturers including Xiaomi, Vivo, Oppo, Apple, contract manufacturer Foxconn, Lava, Micromax and Karbonn.
ICEA explained their problem in this New Digital Compliance System with an example that let there be the shipment may be at port A, but documents digitally uploaded into the customs online system are assigned randomly by an algorithm to an assessment officer (AO) at port X, so they said, “Our members say that AO asks very detailed queries and documents which go back and forth multiple times. This is causing the processing lead time to increase to 8-12 days in many cases, 6-7 days on average. This has disrupted schedules across the board.”
ICEA also explained that a wave in trade volume is expected after production-linked incentive (PLI) applicants start manufacturing in India and this will make the problem even worse.
ICEA further added, “Given the combined capacity forecast by PLI applicants, the import/export load that various ports (New Delhi Airport / ICDS, Chennai, Bangalore Airport / ICDS) will surge to 3000-4000 air pallets per week at airports and about 700-800 containers per month in ICDS.”
It also said that according to their estimates, this will occupy storage capacity available to the extent of 60% of these stations due to the delays in the assessment will make the problem even worse.
The PLI scheme with a total outlay of Rs 41,000 crore will provide graded incentives to 5 global and 5 Indian companies to manufacture mobile phones in India. Close to 20 applications from the likes of Samsung, Apple and Dixon have been received for the scheme.
ICEA also said in its letter to CBIC, “The basic objective is to reduce compliance costs and manage inventory. There is no fear of revenue loss since AEOs are selected based on rigorous criteria and subjected to a comprehensive audit later on.”
With Warm Regards,