1. AEO accreditation (AEO T1 / T2 / T3 / LO)
The Authorised Economic Operator Program (AEO) is a voluntary program run by the Indian customs. Its aim is to improve the security and efficiency of the international supply chain and make it easier for legal goods to move across borders.
The AEO Program has three levels: AEO-T1, AEO-T2, and AEO-T3. Each level offers increasing benefits and has different compliance requirements. It's available for both importers and exporters. Additionally, there's an AEO LO Certificate for other parties like custom brokers and warehouse operators.
The AEO certification brings numerous benefits to businesses. AEO Exporters can declare their Standard Input Output Norms (SION) even when they are not officially notified. AEOs also enjoy the advantage of Direct Port Delivery for their imports, ensuring faster and smoother clearance processes. For exports, AEOs can use Direct Port Entry for their factory-packed containers, making export procedures more efficient.
2. MOOWR (Manufacturing or Other Operations in Warehousing Regulation 2019)
The Central Board of Indirect Taxes and Customs (CBIC) have taken significant steps to promote India as a global manufacturing hub and support the 'Make in India' initiative. To facilitate this, the CBIC introduced 'The Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019 (MOOWR Scheme).
This scheme allows businesses to import raw materials and capital goods into private bonded warehouses without paying any duty, enabling them to carry out manufacturing and other operations.
Under Section 65 of the Customs Act, 1962, the owner of warehoused goods can conduct manufacturing processes or other operations within the warehouse with the permission of the Principal Commissioner/Commissioner of Customs.
3. SVB (Transfer Pricing – Special Valuation Branch Customs)
The Special Valuation Branch (SVB) is a special unit of the Indian Customs Authorities that looks into import transactions between Indian buyers and foreign suppliers who have a close relationship. This relationship can sometimes affect the import price, leading to lower customs duty on the goods being brought into the country.
In simpler terms, SVB is like a detective team that investigates the value of goods being imported when the parties involved are closely connected. Its main goal is to check if the goods are being invoiced at a fair market price, known as the "arm's length price," or if the value has been intentionally lowered to reduce the customs duty that needs to be paid.
Now, who are these "related parties"? They are the Indian importer and the foreign supplier who have a specific type of connection, as defined by Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. SVB steps in to examine the transactions between these related parties to ensure everything is done fairly and according to the rules.
4. Project Imports (Essentiality Certificate)
The Project Imports Scheme is a special concept used only in the Indian Customs system. It applies to all the goods imported for the purpose of setting up a new industrial project or expanding an existing one significantly. Under this scheme, these imported goods are put under a single classification, called heading 98.01, in the Custom Tariff Act, 1975.
This means they are subjected to a single rate of duty, instead of being individually assessed based on their specific types. Usually, when goods are imported, they are classified separately under different categories in the tariff and then assessed for the appropriate customs duty. However, for industrial projects, a wide variety of goods are imported, and it becomes complicated and time-consuming to classify and assess each item separately. In addition, suppliers providing materials for the project may not value each and every item or part of machinery supplied in different stages. This delays the assessment process and can lead to delays and increased costs for the project.
To make things simpler and faster, the Project Imports Scheme places all the imported goods needed for the project under one single tariff category in the Customs Tariff Act. This way, the assessment process becomes quicker and more straightforward, ensuring faster clearance of goods and helping to facilitate the smooth implementation of the industrial project.
5. IGCR permissions (Import of Goods on Concessional Rate of Duty)
The Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 are a set of rules that aim to ensure that imported goods are used for their intended purpose, as specified in the government notification that prescribes these rules.
Some important changes were made to the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 in 2021 and March 2022.These changes were focused on introducing automation and making the entire process contactless, which means reducing the need for physical interactions during the import process.
Now, the Central Board of Indirect Taxes and Customs (CBIC) has introduced the new Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022. These rules replace the existing Customs (Import of Goods at Concessional Rate of Duty)Rules, 2017, and they came into effect on 10th September 2022.The new rules expand the scope of the process to cover notifications other than exemption notifications. They also capture the specific purpose of the import, such as for specified end use, supply to an end-user recipient, manufacturing, exports, and more, as mentioned in Customs Notifications. The focus remains on end-to-end automation, making the import process more efficient and streamlined from start to finish.
6. SEZ / EOU / FTWZ set up / Debonding
SEZ, which stands for Special Economic Zone, is a specific geographical area where the economic laws are more flexible compared to the rest of the country. The primary goal of SEZs is to attract foreign investments, promote infrastructure development, and generate job opportunities.
An EOU, Export Oriented Unit, is a type of SEZ that is dedicated to exporting all of its produced goods and services. However, it is allowed to make limited sales in the domestic market for specific activities. Trading units are not considered EOUs and are not part of this category.
FTWZ, or Free Trade Warehousing Zone, is a specialized type of SEZ focused on facilitating trading and warehousing operations. Its main objective is to offer top-notch warehousing facilities equipped with advanced technology to support international trade activities.
De-bonding refers to the process of exiting an SEZ or EOU. During de-bonding, the unit can sell its goods in the domestic market by paying the required duties and taxes. Assets are transferred from the SEZ or EOU to the domestic tariff area (DTA) as part of this process.
7. Custom Appeals
In countries where Customs decisions, actions, or omissions cannot be reviewed, traders face a situation where Customs officers have significant discretionary powers. This imbalance can result in issues like corruption, delays in releasing goods, or higher prices for imported goods. To solve these problems and ensure fairness, the right to appeal in Customs matters is essential. It helps trade go smoothly and ensures that Customs follows the rules and laws.
If a taxpayer is unhappy with a decision made by a Customs Officer, they can appeal to the Commissioner of Customs (Appeal) for a fair solution. The Authority in charge of the appeal process must provide a written ruling within three months of receiving the appeal application. This helps keep the process transparent and efficient, ensuring that international trade functions properly and adheres to the right standards.
8. DRI / ED / CAAR cases – Representation
The Directorate of Revenue Intelligence (DRI) is an Indian intelligence agency responsible for leading anti-smuggling intelligence, investigations, and operations. Its primary purpose is to safeguard India's national and economic security by preventing illicit smuggling of various items, such as weapons, gold, drugs, counterfeit money, antiquities, wildlife, and environmental products. Additionally, the DRI combats black money, trade-based money laundering, and commercial fraud.
The Directorate of Enforcement (ED) is India's domestic law enforcement and economic intelligence organization tasked with enforcing economic laws and combating economic crime. The ED investigates and prosecutes cases involving money laundering, currency infractions, and other economic crimes. Its main goal is to prevent the creation and circulation of black money and ensure compliance with foreign exchange and money laundering regulations.
The Customs Authority for Advance Rulings Regulations (CAAR) was established by the Central Board of Indirect Taxes in 2021 to create the Customs Authority for Advance Rulings. This Authority has the power to hear, decide on all applications and petitions, and issue advance rulings.
9. Customs (Legal and Litigation)
Customs law is a complicated legal field that deals with regulating the movement of goods across international borders, both for import and export. It forms an integral part of international trade law and involves the imposition of customs duties and taxes on imported and exported goods. Customs litigation, on the other hand, pertains to disputes that arise between importers/exporters and customs authorities. These disputes can revolve around various issues, such as how goods are classified, valued, or interpreted under exemption notifications, as well as restrictions and prohibitions on cross-border trade.
10. DPIIT – Vendor Regn. Trading Across Border Rule 144 GFR 2017
The Department for Promotion of Industry and Internal Trade (DPIIT) has established a Registration Committee to serve as the Competent Authority for registering bidders from countries that share a land border with India. According to the Order, any bidder from such countries can participate in procurement processes for goods, services (including consultancy and non-consultancy services), or works (including turnkey projects) only if they are registered with this Competent Authority.
The latest change to the General Financial Rules 2017, notably Rule 144 (xi), has imposed limitations on bidders from countries bordering India. Under the authority granted by Article 144 (xi) of the GFR, any bidder from these countries must register with the Competent Authority in order to participate in Public Procurement.
11. Legal and Litigation Services
Litigation services refer to various services provided to attorneys and law firms to aid them in preparing, managing, and effectively litigating ongoing and pending cases before the court or a judicial body.
These services entail data management tasks, which involve creating databases to effectively handle, sort, index, abstract, and coordinate vast amounts of data. Litigation support services encompass a wide range of assistance, including record retrieval, subpoena services, forensic accounting, legal photography, and other case-related activities. Additionally, they can involve document review, legal research, and records retrieval. Litigation support firms or consultants offer specialized services to assist attorneys in managing court cases. This includes tasks such as identifying, locating, preserving, collecting, preparing, reviewing, and producing facts, information, and materials for the purpose of obtaining evidence to be used in the case.
12. Other support in Custom Compliances
Customs compliance means following the rules and laws set by the government for importing and exporting goods. If you don't comply with these rules, you may face fines or even go to jail for breaking them. So, as a business owner, it's essential to follow all the laws and regulations to avoid getting in trouble with the authorities and to keep your business safe. Customs compliance not only safeguards your business but also facilitates smoother international trade.
By adhering to the rules and regulations while importing or exporting goods between countries, businesses can avoid fines or penalties if any issues arise during border crossings in the future. In essence, maintaining customs compliance allows you to trade more effectively in foreign markets while staying clear of potential troubles with authorities.