Importers can get shipments faster and face low penalties

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Importers can receive their shipments faster and face lower penalties if they recognize violations, as part of a government action plan to facilitate cross-border trade.

The Central Council of Indirect Taxes and Customs (CBIC) on Friday released the National Action Plan for Trade Facilitation to cut red tape under three chapters: legislative, administrative and technological changes. The idea is to reduce the cost and time involved in trading across borders, to make the legal regime more predictable and to improve the ease of doing business. These efforts are also part of India’s commitments under a World Trade Organization agreement on trade facilitation.

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A key goal is to reduce cargo release time to 12 hours for outgoing air cargo and 24 hours for outgoing ocean cargo. The target is 48 hours for inbound ocean freight and 24 hours for inbound air freight. According to the CBIC, this will improve the investment climate in the country.

The CBIC plan proposes provisions for voluntary disclosure of violations and mitigation of penalties, release of shipments before final determination of tariffs, and restriction of the introduction of new preshipment inspection requirements. During the pandemic, the customs department took several steps to reduce paperwork and eliminate the physical interface between traders and officials. Cutting red tape and simplifying cross-border trade is a priority for the Narendra Modi administration, as it is reported by the World Bank as one of the main determinants of the ease with which business can be conducted in a country.

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India is constantly striving to improve its world ranking when it comes to the ease of doing business. The World Bank’s Doing Business 2020 report highlighted that India’s reform efforts targeted all areas measured in the ranking, with a focus on areas such as paying taxes, trading across borders and resolving insolvency. India has made “a huge leap upward” by improving its position from 130 in the Doing Business 2016 ranking to 63 in Doing Business 2020, according to the World Bank report. The aim of the latest Trade Facilitation Action Plan is to help improve India’s position in the top 50. The World Bank’s Trade Across Borders indicator measures the time and cost associated with trading. export and import logistics and covers document compliance.

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