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Buoyed by the success of the direct port delivery (DPD) scheme introduced at seaports, the Government proposes to implement a similar concept at inland container depots (ICDs) or dry ports to cut time and costs for cargo imported in containers.
Under DPD, import containers are delivered directly to pre-approved clients at the port instead of waiting at a container freight station (CFS) located outside for clearance, which reduces cargo dwell time and costs for shippers. DPD was first implemented in the Jawaharlal Nehru Port, India’s biggest container gateway, and later extended to all the gateway ports, including Chennai Port and privately-run Mundra port.
“Going by the success of DPD at JNPT and encouraging figures at other gateway ports, the Central Board of Indirect Taxes and Customs (CBIC), intends to implement a similar concept at ICDs under the name ‘Direct Inland Delivery’ or DID,” Pranab Kumar Das, special secretary and member, CBIC, wrote in a June 18 communication to Chief Commissioners of Customs. BusinessLine has reviewed a copy of the communication.
The procedure, Das wrote, would be applicable for the ICD-bound containers only after entry inwards have been granted at the gateway port.
From a slow start about two years ago, the share of DPD in the overall imports has crossed 40 per cent, from about 5 per cent.
The government has since decided not to grant permission for fresh proposals to set up CFSs in the vicinity of Jawaharlal Nehru Port Trust (JNPT) and Chennai Port Trust. The ban has now been extended to Visakhapatnam Port Trust and Mundra Port also, a Shipping Ministry official said. A CFS is an off-dock facility licensed by the customs department to help decongest a port by shifting containerised cargo and for carrying out customs-related activities outside the port area. An ICD also provides similar services, the only difference is that it is located in the hinterland (cargo generating and distributing areas) far away from the ports.
Duty payment
Under the direct inland delivery scheme being worked out by the CBIC, importers would have to file the import declaration before the arrival of the goods from the gateway ports at the ICD. The importer would pay the duties accordingly or on deferred payment basis.
Currently, custodians at ICDs offer free period to importers before they clear containers carrying imported goods.
“There is a need to take up this aspect with the respective custodians so as to devise a tariff structure (which acts as a financial incentive) where under the importers voluntarily opt for DID clearance for pre-identified containers rather than avail the free period at ICD as non-DID container,” Das told Chief Commissioners.
“The tariff structure could provide that if the DID container is not picked up within 24 hours of the out of charge (granted) by the Customs, the custodian may impose an additional graded fee depending upon the number of days the DID container overstays,” Das added.
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