Thousands of containers that arrived from China post outbreak of Coronavirus are stranded at various Indian ports as documents giving details of goods inside the boxes that need to be given to Indian consignees are stuck inside locked offices of shippers at Chinese cities.
As a result, Bills of Entry (BoE) could not be filed with the Customs Department to clear the containers. BoE is prepared by shippers containing information of the goods inside the container, and is presented to Customs by the consignee for clearing the boxes.
The consignee or his agents need to file BoE with the Customs within 24 hours of the container’s arrival in the port. If not, the penalty is ₹5,000 per day for the first three days of arrival and ₹10,000 daily thereafter.
“Most of the documents of the containers that landed at the Chennai port are locked inside the closed offices of shippers in China,” said S Nataraja, President, Chennai Customs Brokers’ Association (CCBA). “We are unable to file BoEs with the Customs to clear the goods,” he told BusinessLin e. The penalty could run into a few lakhs of rupees if the cargo is not cleared in a few days, he added.
In a recent post-Budget interaction with Finance Minister Nirmala Sitharaman in Chennai, Nataraja urged waiver of the late penalty charges for goods arrived from China lying at Chennai port. Importers are unable to produce/receive the documents from their suppliers as Chinese offices were closed due to the virus outbreak, he told the Finance Minister.
It is a genuine case and the minister asked Nataraja to give details of the affected parties to the Customs Department for waiver of penalty. The details of the shipment from China are being produced to the department with nearly 35 containers identified so far at the Chennai port. There is no data on how many containers have come from China, he added.
Incidentally, a circular issued by the Commissioner of Customs, Chennai, on February 14 could give some reprieve for those seeking penalty waiver for goods landed from China. To avoid recalling and reassessing the procedure for waiver of late fee, a separate option is provided for waiver of late filing charges to de-link it with assessment. This will remove the necessity for reassessment of the BoE wherever the charges are to be waived.
“The circular is an appreciable move, which will reduce the burden on the consignees due to non-payment of avoidable penal charges, especially for the Chinese goods where receiving documents itself is a challenge,” said G Raghu Shankar of International Clearing and Shipping Agency.
Global supply chain has been badly impacted due to Coronavirus following disruption in shipping services. Maersk, the world’s largest shipping company, on February 17 said that majority of Chinese provinces are gradually resuming work. However, labour shortage remains an issue for many factories due to local quarantine policies.
Abhik Mitra, Managing Director and CEO, Spoton Logistics, said that in fiscal 2018, India imported goods worth $73 billion from China. Closure of China-based factories, ports and warehouses will impact availability and prices of Chinese products in the short term. However, in the long term, more vendors and OEMs could relocate at least part of their production base to India to de-risk their supply chains and benefit from a more diversified supply base, he added.