The Central Board of Indirect Taxes and Customs (CBIC) has discontinued the requirement for shipping lines to submit manual documents and statements for containers imported duty-free under Notification No. 104/94-Customs.
The circular revises the monitoring mechanism for duty-free imported containers by replacing manual documentation with an automated reporting system.
Notification No. 104/94-Customs grants exemption from customs duty and additional duty on durable containers imported by shipping lines, subject to specified conditions. These conditions include execution of a customs bond, re-export of the containers within six months, or payment of applicable customs duty in the event of non-compliance.
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Under the existing framework, shipping lines were required to manually intimate customs authorities regarding the identification particulars and movement of containers outside the customs area. Customs officers manually debited or credited the bonds based on electronic filing of Import General Manifest (IGM), Sea Arrival Manifest (SAM), Export General Manifest (EGM), and Sea Departure Manifest (SDM), resulting in additional paperwork and administrative burden.
After examining representations received from shipping lines, CBIC has decided to automate the monitoring process. Instead of relying on manual submissions, the Directorate General of Systems (DG Systems) will generate reports identifying containers that have not been re-exported within the prescribed six-month period.
These reports will be made available on the ICEGATE portal, enabling shipping lines, Non-Vessel Owning Common Carriers (NVOCCs), steamer agents, authorised agents, and Customs officers to take appropriate action wherever necessary under the Customs Act, 1962.
The circular further clarifies that shipping lines, NVOCCs, steamer agents, and their authorised representatives will continue to execute customs bonds without the requirement of furnishing any surety. However, the cumbersome process of manual bond debit and credit for each transaction will be eliminated, significantly reducing compliance costs and saving time for both trade and customs authorities.
The circular also aligns with the recommendations contained in the Ministry of Ports, Shipping and Waterways’ “One Nation One Port Process” report. The report advocates modernization of terminal and port operating systems to eliminate manual approvals and physical verification during gate-in and gate-out operations.
According to CBIC, adoption of automated systems will enhance supply chain security while removing the need for physical verification of container movement at ports and terminals, thereby improving operational efficiency.
Recognising the need for complete automation, CBIC has directed field formations to coordinate with DG Systems and port or terminal operators for the development and integration of electronic gate systems capable of digitally recording container movements into and out of customs areas.
Port and terminal operators have also been instructed to maintain electronic records of all containers entering or exiting notified customs areas, replacing manual record-keeping practices.
The Board has instructed Customs field formations to implement these facilitation measures in a trade-friendly manner and issue suitable Public Notices informing stakeholders of the revised procedure. Any implementation-related difficulties are to be brought to the notice of the Board for appropriate resolution.
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