Digital Custom Clearance Procedure

Digital Customs Clearance Procedure in India

The transition from manual to digital customs clearance has significantly transformed international trade in India, aiming to enhance efficiency, transparency, and speed. Digital procedures are primarily facilitated through the Indian Customs Electronic Gateway (ICEGATE), an online portal managed by the Central Board of Indirect Taxes and Customs (CBIC).

Core Digital Platform: ICEGATE (Indian Customs Electronic Gateway)

• Explanation: ICEGATE is the central portal for electronic filing in Indian Customs. It provides a single point of access for importers, exporters, and Customs House Agents (CHAs) to interact with customs electronically.
• Purpose: To streamline customs procedures, reduce paperwork, expedite clearance, and improve overall trade facilitation.

Key Aspects of Digital Customs Clearance Procedure

The digital procedure largely mirrors the steps in manualIndia, clearanceprimarily butfacilitated leveragesby electronicICEGATE, systemsaims forto document submission, processing,streamline and communication.expedite Here'trade. Let's a breakdown of the digital aspects withinrevisit the import and export procedures:procedures with corrected step numbering and enhanced details.

A. Digital Aspects in Import Clearance Procedure:Procedure

1. Step 1: Importer Registration (Pre-requisite - Digital Facilitation)

   • Digital Facilitation for Registration: While registration itself isn't fully within the customs clearance procedure, digital platforms facilitate obtaining necessary registrations:
     • IEC (Importer-Exporter Code) via DGFT Portal: Application for IEC is primarily online through the DGFT (Directorate General of Foreign Trade) portal. This is a pre-requisite for import/export.
     • GST Registration Online: GST registration for businesses involved in import is also done online via the GST portal (GSTN).

   1. Step 2: Arrival of Goods & Digital Filing of Bill of Entry (Digital)

      • Electronic Filing of Bill of Entry (BOE) via ICEGATE:
        • Explanation: Importers or their CHAsCustoms areHouse requiredAgents to(CHAs) digitally prepare and file the Bill of Entry electronically through the ICEGATE portal. This replaces themanual needpaper-based for physical paper submissions.filing.
        • Example:Process: Instead
          of
          • Log physicallyin submittingto multipleICEGATE copiesusing ofdigital credentials.
          • Select the option for Bill of Entry atfiling.
          • Fill in the customsonline house,form anwith importerrequired uploadsdetails: Importer information, HS Code, Value, Origin, Port, etc.
          • Upload supporting documents digitally (Commercial Invoice, Packing List, etc.).
          • Submit the digitally preparedsigned Bill of Entry document to ICEGATE.Entry.
        Data Transmission: Information from the Bill of Entry is transmitted electronically to the Customs system for processing.

   2. Step 3: Digital Customs Examination & Duty Assessment (Digital)

      • Electronic Verification of BOE & Documentation:Documents:

        • Explanation: Customs officers access and verifyreview the digitally submitted Bill of Entry and supportingattached documents electronically within the ICEGATE system.
        • Process:
          • Customs officers receive electronic notification of filed BOEs.
          • They review the data and uploaded documents on their systems.
          • Queries or discrepancies can be raised electronically within the system. to the importer/CHA.

      • DigitalAutomated Duty Assessment:Calculation:

        • Explanation: The customsICEGATE system automatically calculates the customs duties (BCD, IGST, CVD, etc.) based on the HS code, declared value, origin, and applicableprevailing dutytariff rates, leveragingall pre-configured rules and tariffs within the digital system.system.
        • Process:
          • Once the BOE is submitted, the system processes the data.
          • Duty calculation is performed automatically based on pre-set rules and tariff schedules.
          • The assessed duty amount is displayed electronically.

      • Risk Management System (RMS): Integration:

        • Explanation: ICEGATE integratesis integrated with athe Risk Management System that(RMS). The RMS electronicallyautomatically profiles and assesses the risk profile ofassociated with each import consignment based on various parameters.pre-defined Thisparameters system(importer determinesprofile, goods type, origin, etc.).
        • Process:
          • RMS analyzes the data from the filed Bill of Entry in real-time.
          • Based on risk assessment, it automatically assigns a channel for inspectioninspection: (Green, Orange, Red)or automatically,Red.
          speeding
          • Channel upassignment is electronically updated in the decision-makingsystem process.and communicated.

   3. Step 4: Physical Examination & Risk-Based Inspection (Partially Digital)

      • Electronic Channel Assignment Notification:& Facilitation:

        • Explanation: The channel assigned by the RMS (Green, Orange, Red) is communicatedelectronically electronicallynotified through ICEGATE to both customs officers and the importer/CHA.
        • Process:
          • Importer/CHA can check the channel assignment status on ICEGATE.
          • Green Channel (No Inspection): System automatically processes for clearance if Green Channel is assigned.
          • Orange Channel (Document Check Only): Customs officers conduct document verification electronically (already largely done in Step 3).
          • ExaminationRed OrdersChannel (ifPhysical Red Channel)Inspection): IfSystem generates an electronic examination order for customs officers to conduct physical examinationinspection.
          is
          required

      • Digital Recording of Examination Results:

        • Explanation: Customs officers, when conducting physical examinations (Red Channel), the examination order is generated and communicated digitally to the relevant customs officers.
        • can Recording Examination Results (Digital): Customs officers can record their examination findings and observations directly into the system,ICEGATE makingsystem using digital interfaces (e.g., tablets or computers at inspection points).
        • Process:
          • Customs officer physically examines the processgoods moreas transparentper examination order.
          • Examination findings (discrepancies, conformity, etc.) are digitally entered into ICEGATE.
          • Digital recording enhances transparency and auditable.audit trail.

   4. Step 5: Digital Duty Payment & Customs Out of Charge (Digital)

      • Electronic Duty Payment via ICEGATE:

        • Explanation: Importers can make duty payments online directly through ICEGATE, using netvarious banking,digital credit/debitpayment cards,methods.
        or
        • otherProcess:
          • Access the payment section in ICEGATE.
          • Select from available online payment methodsoptions: integratedNet withBanking, Credit/Debit Cards, etc.
          • Initiate payment and complete the portal.transaction This eliminates the need for physical bank challans for many transactions.online.
          • Receive Example: An importer can pay the assessed IGST and BCD directly through ICEGATE using their corporate banking account, receiving immediateelectronic confirmation of payment within theICEGATE.
          system.

      • Electronic 'Out of Charge' Order:

        • Explanation: Once duty payment is confirmed and all checks are satisfactory,completed successfully (including examination if applicable), the 'Customs Out of Charge' order is issued electronically through ICEGATE.
        • Process:
          • System verifies duty payment confirmation.
          • If all is in order, the system.'Out Thisof digitalCharge' status is electronically updated.
          • Importer/CHA can download or view the 'Out of Charge' order isdigitally, proofserving ofas clearanceofficial andclearance.
          allows
          for
        the
        goods to be released.

   B. Digital Aspects in Export Clearance Procedure:

   Procedure

   1. Step 1: Exporter Registration (Pre-requisite - Digital Facilitation)

      • Digital Facilitation for Registration: Similar to imports, digital platforms facilitate exporter registrations:
        • IEC (Importer-Exporter Code) via DGFT Portal: Online application and issuance.
        • Registration with Export Promotion Councils (EPCs): Many EPCs offer online registration facilities.
        • GST Registration (already online): If required for GST refunds, exporter GST registration is online.

   2. Step 2: Digital Filing of Shipping Bill (Digital)

      • Electronic Filing of Shipping Bill via ICEGATE:
        • Explanation: Exporters or theirCHAs CHAsdigitally prepare and file the Shipping Bill electronically through ICEGATE, similar to the Bill of Entry for imports..
        • Example:Process: An
          exporter
          • Log of handicrafts preparingin to shipICEGATE.
          goods can file
          • Select the option for Shipping Bill onlinefiling.
          via ICEGATE, selecting
          • Choose the appropriate type (e.g., Whiteof Shipping Bill for(White, duty-freeGreen, exports)Yellow, andBlue).
          attaching
          • Fill necessaryin the online form with exporter details, HS Code, value, destination, etc.
          • Upload required documents digitally.digitally (Invoice, Packing List, etc.).
          • Submit the digitally signed Shipping Bill.

   3. Step 3: Digital Customs Verification (Digital)

      • Electronic Submission of ShippingExport Documents:

        Supporting
        • Explanation: All supporting export documents like invoices, packing lists, and others are uploaded digitally to ICEGATE along with the Shipping Bill.
        • Process:
          • Upload documents directly during the Shipping Bill filing process or subsequently through ICEGATE's document upload facility.
          • Documents are digitally linked to the Shipping Bill for easy access by customs.

      • Digital Customs Assessment:Assessment and Verification:

        • Explanation: Customs officers electronically verify the Shipping Bill and submitted documents electronically,within ICEGATE, assessing declared export benefits (if any) and ensuring compliance.
        • Electronic Communication:Process:
          • Customs officers review the Shipping Bill and documents online.
          • They verify details like HS Code, value, quantity, eligibility for export incentives, etc.
          • Queries or clarifications fromcan customs,be ifraised any,and areresponded typically communicatedto electronically throughvia ICEGATE,ICEGATE.
          and
          exporters
        can
        respond digitally.

   4. Step 4: Cargo Examination & Digital Let Export Order (LEO) (Partially Digital)

      • Examination Orders (Digital, if required):

        • Explanation: If physical examination of export cargo is mandateddeemed necessary (based on risk criteria or type ofspecific goods), examination orders are generated and communicated digitally.electronically through ICEGATE.
        • Process:
          • RMS might trigger examination based on risk assessment.
          • If examination is required, an electronic order is generated in ICEGATE.
          • The order is visible to customs officers and relevant stakeholders.

      • Electronic Let Export Order (LEO):

        • Explanation: After satisfactory verification and examination (if any)performed), the Let Export Order (LEO) is issued electronically through ICEGATE.
        • Process:
          • Once customs is satisfied, they issue the LEO digitally.
          • LEO status is updated in ICEGATE and visible to the system,exporter/CHA.
          allowing
          • Electronic LEO authorizes the shipment to proceed for export.

   5. Step 5: Digital Export General Manifest (EGM) & Departure (Digital)

      • Electronic Filing of Export General Manifest (EGM): by Carrier:

        • Explanation: Shipping lines andor airlines fileare responsible for filing the EGMExport electronicallyGeneral throughManifest ICEGATE(EGM), providingwhich detailsis a comprehensive list of all export shipmentscargo loaded on a vessel or aircraft. EGM filing is done electronically through ICEGATE.
        • Process:
          • Shipping lines/airlines electronically prepare and file the EGM via ICEGATE.
          • EGM details include Shipping Bill numbers, cargo details, vessel/flight information, etc.

      • Digital Verification and Approval of EGM:

        • Explanation: Customs verifiesauthorities electronically verify and approvesapprove the EGM submitted by the carrier through ICEGATE.
        • Process:
          • Customs officers review the EGM data electronically.
          • They verify if the details match the approved Shipping Bills.
          • Once verified, customs digitally approve the EGM in ICEGATE.

      • ClaimingFacilitation of Export Benefits (FacilitatedDigital Digitally)Integration):

        • Explanation: The electronic filing anddigital processing of Shipping Bills and EGMs facilitatein ICEGATE facilitates the subsequent processing and claiming of export benefits like GST refunds and duty drawbacks,drawbacks. ICEGATE data is often integrated with other government systems like GSTN for seamless benefit processing.
        • Process:
          • Data from digitally processed Shipping Bills and EGMs is used as the basis for export benefit claims.
          • Exporters can track the status of their benefit claims online, often through integrationintegrated withportals.
          other
          digital
        systems
        like GSTN.

   Benefits of Digital Customs Clearance

   • Faster Clearance: Electronic processing significantly reduces processing time compared to manual handling of documents.
   • Reduced Paperwork: Minimizes the need for physical documents, promoting paperless trade and reducing administrative burden.
   • Increased Transparency: Digital systems provide better tracking and visibility of the clearance process for both customs and traders.
   • Enhanced Efficiency: Automation of processes like duty calculation and risk assessment improves operational efficiency for customs and traders.
   • Lower Transaction Costs: Reduced paperwork, faster processing, and online payments contribute to lower transaction costs for businesses.
   • Improved Compliance: Digital systems help ensure better adherence to regulations and standardized procedures, reducing errors and discrepancies.
   • Facilitation of Trade: Overall, digital customs clearance plays a crucial role in facilitating smoother and faster international trade, making Indian businesses more competitive globally.

   In summary, digital customs clearance in India, primarily through ICEGATE, has revolutionized trade operations by leveraging technology to streamline processes, enhance efficiency, and improve the overall trading environment. While physical inspections remain in certain cases, the digital framework significantly expedites and simplifies the majority of customs procedures.