Gaurav Masaldan/R Ananth

Digital Transformation is one of the key enabler of Ease of Doing Business. The World Customs Organisation has also dedicated 2022 to ‘Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem.’

The need for a digital transformation in government services and especially in taxation, is well appreciated and understood. This was also emphasised by Prime Minister Narendra Modi in the Rajsva Gyan Sangam, held in 2016,where he outlined the ‘RAPID’ charter for tax administrators, hinging on five critical elements —Revenue, Accountability, Probity, Information and Digitization.

Indian Customs has been steadfast in its commitment to follow the letter and spirit of the above mandate and a series of reforms in the Customs procedure have been introduced over a period of time in this direction, by the active leveraging of technology .As a consequence, India’s rank in the World Bank’s Trading Across Borders, (Ease of Doing Business (EoDB) index has come down from 146 (2017) to 68 (2020). This transformational outcome has also been widely appreciated by the various stakeholders in the logistics supply chain.

The history

Though Indian Customs has been using Sperry systems for data entry purposes since the 1980s, the automation of processes began in 1995, with introduction of Indian Customs EDI (Electronic Data Interchange) System (ICES) in New Delhi, followed by the introduction of a web portal ICEGATE in 2003 and a Risk Management System (RMS) in 2006.

The Consolidation of IT infrastructure in 2011, allowed rapid expansion to locations across the country. Today, electronic processing is enabled in 254 Customs locations which handle more than 99 per cent of the trade of the country.

In 2016, as a part of the EoDB initiative to provide a single interface for all border clearance, the Single Window Interface for Facilitation of Trade (SWIFT) was introduced to replace nine separate documents into import declaration, integrated risk assessment and electronic clearance from Partner Government Agencies (PGAs). This was followed by the introduction of an online document repository (eSANCHIT) in 2018, which enabled paperless processing and laid the path for further transformational reforms. The Express Cargo Clearance Systems (ECCS) was also introduced for expedited shipments in the courier mode in 2017. In 2019, the ATITHI, mobile application was introduced for facilitating international travelers.

Integrated risk assessment is India’s innovation in single windows across the world. This is made available by CBIC’s state-of-the-art, Risk Management framework, enabling Customs to strike the right balance between facilitation and enforcement. Using a complex matrix of parameters, 85 per cent of the imports are cleared based on self-declaration. This is supplemented by scanning of containers at major ports. Similarly, the procedure for drawback disbursal has also been expedited based on risk based clearance.

In 2019, the Turant Customs programme was introduced as a next generation reform to transform the Customs clearance processes as a faceless, contactless and paperless experience for the taxpayers. After the introduction of web-based goods registration and the automated clearance functionality, Faceless Assessment was implemented in 2020, to provide anonymity and specialisation in Customs assessment by delinking the geographical limitations, with the aid of technology.

This is supported by generation of secure QR based PDF copies of the Bills of Entry and Shipping Bills. All these reforms have created an environment where the EXIM trade, involved in these processes, can complete compliances online . The depth of this change can be measured by the fact that Customs clearances were largely unaffected by travel restrictions during the Covid pandemic.

The Authorised Economic Programme (AEO), introduced in 2016 followed by the Direct Port Delivery Scheme in major ports have given a further fillip to streamlining logistics and reducing dwell time and costs for a significant section of the trade. Time Release Studies (TRS) conducted annually by the Customs formations, in accordance with the World Trade Organisation’s (WTO), Trade Facilitation Agreement (TFA), enables measurement of dwell time with suggestions for further improvements. National TRS is now being conducted in the first week of January, every year, to measure and improve Customs processes, in order to align them with the best global standards.

Electronic Cargo Tracking Systems (ECTS) introduced for Nepal bound transit has simplified the transit process. E-Sealing of factory stuffed containers has added trust to the integrity of the cargo, while reducing the dwell time. Block-chain based pilot introduced in 2021 at ICD Tughlakabad, for electronic cargo tracking is intended to be a game-changer in transit management.

The New Sea Cargo Manifest Regulations (SCMTR) also strive to have end-to-end automation and bring transparency in the process. In 2021, Indian Customs also launched the Compliance Information Portal (CIP), making it simple for the trade to know about all compliances required for cross border trade, at the press of a click. Machine learning techniques are being increasingly deployed in Risk Management.

Similarly, use of Data Analytics is of immense aid in terms of risk profiling, detection of tax evasion and protection of the economic frontiers of the country.

Looking ahead

Going forward, emerging technologies provide the department an ample opportunity to take further strides in bringing about a digital transformation in Customs clearance processes. The automation in bond management, manifest processing, data exchange with countries relating to origin certificates and declaration can make the clearances even simpler.

The revamped ICEGATE Portal will provide all the needed information in a single dashboard. The Non-Intrusive Technologies, both scanners and various handheld technologies will enable screening and examination of goods smarter and less time consuming. The Internet of Things (IoT) including sensors, geo-fencing technologies, will aid in monitoring the physical movement of goods and containers.

Building on its earlier success in bringing about change through the use of technology, Indian Customs shall endeavor to create an even simpler, more transparent and facilitative environment for cross border clearance for the trade and industry, without compromising on the need for enforcement.

Masaldan is Joint Secretary and Ananth is Deputy Secretary (Customs) at the Central Board of Indirect Taxes and Customs (CBIC)