Faceless Assessment for Import/Export Causing Delays: ICEA

Raising concerns of delay due to the faceless assessment of exported and imported electronic products, the India Cellular and Electronics Association (ICEA) has sought exemption of authorized economic operators (AEO) and in-bond manufacturing from the faceless assessment system.

The industry body in a letter to Sandeep Mohan Bhatnagar, Member - Customs and Investigation at the Central Board of Indirect Taxes & Customs (CBIC) has sought "green channel" for self-assessment and automatic clearing for both import and export shipments for all AEO and In-Bond Manufacturing entities, instead of the faceless system.

An entity engaged with international trade is given AEO status by Customs after getting approved as compliant with supply chain security standards. Such an entity gets certain benefits.

In-Bond or bonded manufacturing, on the other hand, allows the manufacturer to import the raw materials and capital goods without payment of customs duty and IGST.

"We request all AEO and In-Bond Manufacturing entities import/export be permitted 'green channel' for self-assessment and automatic clearing for both import and export shipments to promote faster capacity addition and greatly improve ease of doing business," said the letter by Pankaj Mohindroo, Chairman, ICEA.

He added that the faceless system may be used for other segments but AEOs in the electronics sector and 'Bonded Manufacturers' may be exempted.

Mohindroo said that the basic objective is to reduce compliance costs and manage inventory and there is no fear of revenue loss since AEOs are selected based on rigorous criteria and subjected to a comprehensive audit later on.

The letter noted that there is a severe compliance cost in faceless assessment and it has caused the processing lead time to increase to 8-12 days in many cases, 6-7 days on average.

"This has disrupted schedules across the board," it said.

According to ICEA the new system will be an "add on" to the existing Risk Management System under which in the majority of cases were cleared automatically and only select cases were taken up for examination and assessment.

The letter said that self-assessment by importer was the norm and the AEO (Authorized Economic Operator) window was that of automated clearance with Direct Port Delivery with provision for deferred payment of duty.