“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,” the India Cellular and Electronic Association said in a letter dated September 4, addressed to the Central Board of Indirect Taxes & Customs (CBIC).
ICEA represents most global and Indian manufacturers including Xiaomi, Vivo, Oppo, Apple, contract manufacturer Foxconn, Lava, Micromax and Karbonn.
Under the new digital system, 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, ICEA explained.
“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,” it said.
ICEA also added that the surge in trade volume expected after production-linked incentive (PLI) applicants start manufacturing in India will make this problem worse.
“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,” the body said.
By our estimates, this will occupy storage capacity available to the extent of 60% of these stations due to the delays in assessment will make the problem worse, it added.
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 Smasung, Apple and Dixon have been received for the scheme.
“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,” ICEA said in the letter.
AEO is a party involved in the international movement of goods approved by Customs and compliant with international security standards.