In response to last week’s column on procedural relaxations for Accredited Clients of the Customs for getting refund of the 4 per cent additional customs duty (CVD), readers have sent in some queries. Here are the answers.
Accredited Clients Programme (ACP) was introduced in 2005 to give assured facilitation at all the EDI (Electronic Data Interchange)-enabled Customs stations to importers who are assessed as highly compliant. This means that in most cases, excepting a small number of occasions when their consignments will be randomly selected for checks by Customs officers, the Indian Customs EDI System will accept the declared classification and valuation and assess duty on the basis of importers’ self-declaration. The import consignments of ACP clients will also not be subjected to routine examination.
The eligibility criteria for getting recognition under ACP is imports worth Rs 10 crore or excise or Customs duty payment of Rs 1 crore in the previous year. The applicant must have filed at least 25 bills of entry in the previous year and the number of amendments to bill should not have exceeded 20 per cent of the bills of entry filed. Reliable systems of record keeping and internal controls and accounting systems of recognised accounting standards are essential.
Many importers can meet the above criteria; yet only 232 importers have so far obtained recognition under ACP. The reason is that ACP recognition is available only to importers who have not received any showcause notice proposing penalty under the customs, excise, service tax or any allied laws. Also, no duty demands should be pending against the applicant on account of non-fulfilment of export obligation. These conditions are so onerous that only a few meet the eligibility criteria.
Besides, the Risk Management System (RMS) allows most clearances on the basis of self-declaration. So, few have bothered to apply for recognition under ACP.
Some readers have pointed out that even when the Customs have allowed refund of the 4 per cent CVD by way of credit to Duty Entitlement Passbook (DEPB), they are unable to get the re-credit from the offices of the Director General of Foreign Trade (DGFT). In fact, the DGFT has issued Policy Circular number 22 dated February 3, 2010, specifying the procedure to be adopted by the regional authorities for re-credit in the duty credit scrips along with revalidation wherever required. This Circular was issued after detailed consultations with the Department of Revenue (DoR).
It appears, however, that the prescribed procedure does not work in practice. One reader has sent a copy of letter dated April 19, 2010 from Joint DGFT, Central Licensing Area, Delhi that “There is no provision for transmission of value of re-credit of 4 per cent special additional duty through online”. The reader has not got the re-credit despite follow-up.
It appears that certain practical problems have emerged with the existing application software at the Customs end and even accommodating manual re-credit (particularly for DEPB scrips wherein most of these are issued and validation checks are done online only) seems difficult. It appears that the DGFT officials have taken up the matter with the DoR officials. But, no solution has emerged even though several months have passed.
The DGFT should consider payment of interest to the applicants for the delay in grant of re-credit of 4 per cent CVD to the duty credit scrips.
Email: tncr@sify.com
