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Context

• Central Board of Indirect Taxes and Customs (CBIC), presented a set of Time Release Studies (TRS) conducted by the department.

 

TRS

• TRS are a performance measurement tool for assessing the cargo clearance process of the international trade.
• World Trade Organization (WTO) under the Trade Facilitation Agreement (TFA) and the World Customs Organization (WCO) have recommended for conducting TRS.
• TRS adopts average cargo release time, i.e. the time taken from the arrival of the cargo at the customs station to its eventual release for import or export, as the case may be.

 

About NTRS 2022

• The National Time Release Study (NTRS) 2022 covered 15 major Customs formations, including four port categories -

1. Seaports,
2. Air Cargo Complexes (ACCs),
3. Inland Container Depot (ICDs) and
4. Integrated Check Posts (ICPs), which handle about 80 percent of the bills of entry (imports documents) and 70 percent of the shipping bills (export documents).

 

NTRS Findings

Average Cargo Release Time

• The NTRS 2022 has reported further improvement in the average cargo release time for all the four port categories in 2022 over corresponding period of the previous year: by 2 percent for ICPs to significantly higher 16 percent for ACCs.
• For the sea cargo cleared through the sea port or inland container depots average release time has improved by 12 percent.

National Trade Facilitation Action Plan (NTFAP) Targets

• With improvements, the ICPs have achieved the National Trade Facilitation Action Plan (NTFAP) target release time to be achieved by 2023. The other three port categories have reached 75 percent of NTFAP target.

Four-fold ‘path to promptness’

• NTRS 2022 and the Custom House level Time Release Studies, which have been conducted using the same data set, obtained from the customs automated system and following the same methodology, have found strong affirmation for the four-fold ‘path to promptness’ , namely:

1. Advance filing of import documents enabling pre-arrival processing,
2. Risk based facilitation of cargo,
3. Benefits of trusted client program - authorized economic operators, and
4. Direct Port Delivery (DPD) facility.

 

Exports

• In case of Exports, the documentary clearance of export consignments, measured by the time taken from arrival of the goods at the customs station to grant of Let Export Order has been significantly minimized, ranging from 4:04 hours in the case of ACCs to 47:41 hours in the case of ICDs.
• This time is within the differential NTFAP target for the four port categories.
• However, the studies have found that on account of various logistics processes, the time taken in the eventual export after the regulatory clearance, takes long time – accounting from 60 percent of the total time in the case of integrated check post to 92 percent in the case of air cargo.

 

Note: Jawaharlal Nehru Custom House was the first major Custom House to initiate annual TRS beginning in 2017, and NTRS 2022 shows that the average import cargo release time has been halved since then.

 

Trade Facilitation

• Bureaucratic delays and “red tape” pose a burden for moving goods across borders for traders. Trade facilitation—the simplification, modernization and harmonization of export and import processes—has therefore emerged as an important issue for the world trading system.
• Trade facilitation looks at how procedures and controls governing the movement of goods across national borders can be improved to reduce associated cost burdens and maximise efficiency while safeguarding legitimate regulatory objectives.
• The TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues.
• Trade facilitation allows better access for businesses to production inputs from abroad and supports participation in global value chains. Trade Facilitation is particularly important for developing countries.

 

National Committee on Trade Facilitation

• A National Committee on Trade Facilitation (NCTF) was accordingly set up to facilitate both domestic coordination and implementation of the provisions under the Chairmanship of the Cabinet Secretary.
• NCTF is a three tiered body –

1. NCTF as the apex body,
2. Steering Committee Jointly Chaired by Secretary, Revenue and Secretary, Commerce at the mid-level and
3. Five adhoc Working Groups at the lower level to deal with specific issue of Time Release study, Infrastructure up gradation, Legislative issues, Outreach program and issues related to Participating Government Agencies (PGAs).

• Thus, the NCTF comprises of stakeholders from the Government and the private sectors including trade community.

Achievements  of NCTF

• NCTF has played an important role in reducing the high cost of imports and exports so as to integrate our cross-border trade with the global value chain. Some of the landmarks being –
  1. Establishment of a National Single Window system to route all import related formalities viz. Examination, sampling, clearance etc., which involves plethora of agencies, through a single online national portal;
  2. Simplification of fees and charges for various clearance related activities at the borders;
  3. Paperless filing of import/export documents through ‘E-sanchit’ project; and Publishing of resource information viz. procedures for import/export, laws & regulations etc. online for ease of access.

 

National Trade Facilitation Action Plan (NTFAP)

• The NCTF has adopted 76 point National Trade Facilitation Action Plan (NTFAP) which is a reflection of the Government’s commitment to implement the Trade Facilitation Agreement (TFA).
• The National Trade Facilitation Action Plan (NTFAP) aims to transform cross border clearance ecosystem through efficient, transparent, risk based, co-ordinated, digital, seamless and technology driven procedures which are supported by state-of-the-art sea ports, airports and land borders.
• The objectives to be achieved by National Action Plan are improvement in ease of doing business by reduction in cargo release time and cost, move towards paperless regulatory environment, transparent and predictable legal regime and improved investment climate through better infrastructure.
• The Action Plan lists out specific activities which would be carried out by all regulatory agencies like Customs, FSSAI, Drug Controller, Plant Quarantine, DGFT etc in time bound manner. The Co-ordination among all the stakeholders is the key to achieve the objective of Trade facilitation.
• The action points in the Plan are in line with the WTO Trade Facilitation Agreement (TFA) Articles and aligned to our policy objectives on improving the Ease of Doing Business.

WTO Agreement on Trade Facilitation

• The WTO Trade Facilitation Agreement (TFA) entered into force on 22 February 2017. It is a result of the Doha Round of Trade Negotiations, which was launched in 2001. The text of the TFA was adopted by WTO Members at the 9th Ministerial Conference in Bali, in 2013.
• With the trade facilitation agreement WTO Members aim:

1. To “expedite the movement, release and clearance of goods, including goods in transit;”
2. To facilitate “effective cooperation among members on trade facilitation and customs compliance issues;” and
3. To enhance “assistance and support for capacity building” for developing and least developed country members.

 

Proposals under Doha Round Negotiations

• Use of the Internet for publishing information that is useful to traders and in general improving the availability of information. According to the OECD, improvements in information availability would save 1.8 per cent of transaction costs.
• Establishing advance rulings on tariff classification and applicable duties to expedite customs clearance - according to a study by the OECD, advance rulings would achieve the single biggest reductions in trade costs (up to 3.7 per cent).
• Introducing pre-arrival clearance - to allow goods to be released immediately upon arrival.
• Expediting and simplifying the release and clearance of goods.
• Enhancing transparency in customs rulings and administrative procedures.
• Developing a uniform administration of trade regulations.
• Streamlining fees and charges and establishing more discipline in their application - for example, prohibition of the collection of unpublished fees and charges, reduction/minimization of the number and diversity of fees and charges, and prohibition of consular fees - according to the OECD, this could cut 1.7 per cent of total costs.
• Improving coordination among border agencies - according to the OECD, this cooperation would have a significant cost reduction potential, of up to 2.4 per cent.
• Creating a single window – to submit data only once to one agency.
• Establishing discipline for transit formalities and documentation requirements.

 

The aim is to ease border procedures and to facilitate the movement, release and clearance of goods.

 

• A successful conclusion to the negotiations would:

1. Allow governments to apply and conduct border controls more efficiently.
2. Allow traders to move their goods across borders more quickly and easily.
3. Reduce transaction costs and hence reduce prices for consumers and producers.
4. Reduce transit costs in landlocked countries.
5. Reduce bureaucracy and corruption.
6. Facilitate trade for small and medium-sized businesses burdened with excessive bureaucracy and red tape.
7. Add to members' GDP by making trade less costly.

 

India ratified WTO Agreement on Trade Facilitation in 2016. Accordingly India established the National Committee on Trade Facilitation ('NCTF') and The NCTF, in 2017, adopted a 76-point National Trade Facilitation Action Plan ('Action Plan').

 The Action Plan aims achieve improvements in the ease of doing business by reduction in cargo release time and cost, moving towards a paperless regulatory environment, transparent and predictable legal regime and improved investment climate through better infrastructure.

 

https://pib.gov.in/PressReleasePage.aspx?PRID=1815747