Nation-wide E-Governance Projects The CBEC Experience Dharmarajan Krishnan Directorate General of Systems Customs and Excise
Overview • Background to Customs automation • E-Governance as an agent for change • Managing Change • Integration and Synergy -- the Unfinished agenda • Keeping pace with law – challenge or nightmare?
Customs Automation – Building Blocks • Indian Customs EDI System (ICES) • 32 locations ; covers 90% of country’s import / export declarations • 4 million transactions in the year 03-04 ( about 13,500 per day) • Original source of national trade statistics • E Commerce Gateway ( ICEGATE) • Enables e-filing of declarations from the premises of importers/ exporters and custom house agents (55-60%) • Exchanges information with trading partners like banks, custodians, DGFT etc • Certifying Authority for Digital Signatures (iCERT) • Creates secure environment for e-filing • Gives legal validity to e-filing
Customs Automation – Building Blocks • Risk Management based Clearances • Facilitate low risk importers and exporters • Redeploy resources towards better service delivery • Reduce cargo dwell time • E- payment of Duties New Projects on the Anvil • Automated Clearance of courier consignments in partnership with the Express Industry • Advance Passenger Information System • Passenger facilitation based on advance information • Addressing national security concerns
1. E-Gov as an agent of change • Workflow based automation of scrutiny, assessment, duty payment, examination and release • Processes re engineered and reduced from 18 to 6 in Imports, 15 to 5 in Exports. • Processing of documents on first come - first served basis • Accountability through Time stamping • System Appraisal for select import goods • Examination waiver - Green Channel • Automatic credit of Drawback in the bank • Concept of outsourced service centres
Total Demurrage* Vs Number of Shipments(data by M/s Hewlett Packard) * (In Rs Thousands)
TRANSACTION COSTS OF EXPORTS (Source: EXIM Bank of India)
ICES –Managing Change • National Rollout • Core Team visits each site • Norms for Site Preparation • Common Hardware / OS / DB Platform • Site Specific Networking • Common Systems Integration and Support Strategy • Site Support • H/W + OS Support • DB Support • Application Support
ICES –Managing Change • Uniformity in Software • Common Software • Local flavours to suit core operational variations • Air, Sea, Land Border, Container Depot • Strong Version Control at the centre • Monitor implementation of procedures through model public notice • Uniformity in Procedures • Send Model Public Notice to the field office • Vet Draft Public Notice before issue • Send model updates to the Public Notice
2. Integration and Synergy – Challenges ahead • Integrating Regulation across the Value Chain • Integrating Customs and Excise Processes • Integrating with corporate systems • Synergizing with VAT / Income Tax • Tax Compliance throughout the Value Chain for excisable goods. • Tax Compliance with respect to imported goods • Link with Income Tax returns. • Analysing combined tax incidence on commodities • Reducing Compliance Costs for Assessees
Integration and Synergy Essentials • Essentials for better Synergy with VAT • Common Business Identifier • Standardized 11 digit TIN for all the States • Linkage with PAN for Center-State Synergy • Common goods classification code • Adoption of HSN based classification for VAT implementation • Continuation of classification code throughout supply chain • Standardization of Data Elements • Standardization of data elements • Standardization of unit codes • Standardization of reporting
3. Keeping pace with law • Goods classifiable into nearly 12000 tariff sub-headings • 45 types of Import Duties • 14 types of export duties • Around 30 types of excise duties • Each duty has its own means of calculation • One of more types of duty applicable • Notifications run into hundreds • apply to combinations of tariff heads and duty types • may prescribe their own methods of calculation and valuation • multiple notifications may be simultaneously applicable • may have conditions • may cross-reference each other
Keeping pace with law • Policy changes can happen anytime and change anything • Policy changes need to be implemented overnight • Multiple agencies have their own structures of levying taxes and framing policy • Handling annual budget can be a major problem • When we integrate we are exporting the problem to trade and industry • Can we do better?
Keeping pace with law - solutions • Vet laws for “e-friendliness” • Take Systems designers into confidence • Design templates; get templates approved by policy makers and law ministry • Give lead time to industry • Bring clarity and simplicity to law formulation
New Excise Application • E-Registration for excise and service tax • E-filing of returns and refunds • Payment Information from Banks • Integration of e-filing with Risk based Scrutiny • Export facilitation through linkages between Excise and Customs