The Mangaluru chapter of the Confederation of Indian Industry (CII) has urged the Union Finance Minister to streamline the implementation of faceless assessment scheme, which was introduced recently to reduce the interface between trade and Customs.

In a memorandum submitted to Union Finance Minister Nirmala Sitharaman, K Prakash Rao, Chairman of the Mangaluru chapter of CII, said that the faceless assessment initiative, which was introduced by the government with a good intent, will be defeated due to its poor implementation by the authorities concerned.

Giving the example of import of raw cashew nuts (HS Code: 08013100), he said it is a major raw material for an employment-oriented industry. The documents that were earlier getting processed within seven days for this HS Code, are going beyond 15 days after implementation of the faceless assessment scheme. The value of the commodity is arbitrarily getting re-assessed ― being inflated by 50-60 per cent ― in most cases, creating higher duty and IGST payouts, he said, adding that this is putting tremendous financial pressure on MSMEs that are already stressed for liquidity and by higher cost of finance.

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Stating that input credits are not allowed for payment of this additional duty / IGST, he said it has to be cleared only by additional cash deposit. It is unnecessarily choking the cashew entrepreneurs, by locking up their margin money for availing working capital limits.

The entire process of raising a query for re-assessment, replies of the importers to these queries, and then to raise further demands for additional payments are taking over 15-20 days. This has resulted in importers having to pay high demurrage charges, as shipping liners generally provide only 14 free days for clearing.

He said this process is also causing a steep increase in the dwell time of the vessels, which, in turn, will impact the country’s ranking in ease of doing business (EODB), negating the good initiatives of the Government.

He said the assessments also insist on 100 per cent inspection of the cargo, which means the entire cargo has to be de-stuffed in front of the officials at the port and then re-stuffed into the containers. With thousands of tonnes now arriving at New Mangalore Port, this instruction is again creating a serious impediment in clearing the cargo on time, besides the importer having to pay offloading / reloading charges to the dock workers. “This has more of a harassment value than any practical benefit as there is not a single incidence of reported irregularity till date in this commodity,” Rao said.

Suggestions

The CII-Mangaluru memorandum suggested that a specialised cell be created for each HS Code. The cell can study the product in depth and acquire all information on it and become an expert on this product/commodity. All the Bills of Entry under that particular HS Code must go to this cell and get cleared.

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It also suggested a new concept of ‘deemed provisional clearance’. If the clearance goes beyond three working days for any reason, importers with a good track record must be allowed to access this deemed clause for provisional clearance of the cargo by paying the duty generated by the Bill of Entry filed. The importer may be allowed to provide a bond to guarantee the payment of any additional duty in case of an assessment of this Bill of Entry, he said in the memorandum.

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