Background
The Customs Department has simplified the procedures for self sealing with the introduction of electronic self sealing procedures under new GST regime. Previously the Government has come up with a Circular providing the procedure for E-sealing with standard specification required for such seals. With the various recommendations received from the exporters raising concerns on Identity of Vendors of seals, availability of Electronic seal, web based applications and provisioning of readers at customs ports /ICDS. Through this Circular the Government has moved a step forward, trying to address the problems that various exporters are facing and provided further clarity to the procedures and the way they are to be implemented.
Our article aims to highlight clarifications made by Government its latest Circular2.
Availability of Vendors
Several vendors have communicated with the board, regarding the availability of E-Seal by vendors and intentions to provide reader devices at the port/ICDs. The Board has adopted international standards laid down under ISO 17712:2013 for high security seals to ensure reliable quality of electronic seals. It has been further provided that vendors intending to offer RFID seals should furnish certificates required under the ISO standard.
Identity of Vendors
For maintaining uniformity in acceptance of the certificates submitted by the vendors, the certificates must be self-attested certificates from the manufacturers of seals to the Director (Customs), CBEC, North Block, New Delhi, before commencing sales of the seals. If the certificates are in compliance with all requirements of ISO standard, the names of such vendors shall be put up on the Board’s website i.e., www.cbec.gov.in to ensure easy reference of the trade and field information, as soon as they are received.
Availability of E seals
The vendors must provide a contractual agreement between the vendor and manufacturer to the Government. This will serve as a link document and ensure that the seals for which ISO certifications are submitted are the same seals pressed into service. Anytime a vendor changes its manufacturers of seals, a complete documentation relating to the standard specification of the seal as provided in Circular No. 36/2017- Customs, must be provided. This is must be done before commencing sales of seals.
Web Based Application required
The Board has provided clarity regarding the type/specification of the web-hosted application. Information that are sought from exporters like shipping bill number, e-seal number, date of sealing, time of sealing should not be mounted in the electronic seal but tagged to the seal using a web/mobile application to be provided by the vendor of the RFID seals. Vendors are free to develop their own web-enabled application provided the data specified by the Board is incorporated.
Communication between customs stations and RMD must be consistent. All vendors are required to communicate the above mentioned exporters’ information to RMD and the respective ports/ ICDs of exports. This must be transmitted via email in excel format or any other format that may be specified by any field formation or RMD. This would facilitate consolidation of multiple feeds at the customs stations.
Provisions of Readers
Tag Identification (TID) number must be captured the vendor’s data base and the IFC code of the exporters should be linked to the same at the time of sale of the seals. Seal’s identity should be checked with its TID at Port/ICD. The Government has provided vendors with freedom to build better features of RFID system after compliance with the abovementioned minimum features.
Vendors are advised to publicise on their website, name of each port/ICD where readers are provided. Custodians and Customs brokers are also advised to engage with vendors actively regarding availability of reading facilities at container terminals and ICDs so that there is no dislocation to logistics operation.
Effective From
The Board has deferred the implementation of mandatory self sealing use if RFID container seals to 1st November, 2017 keeping in view the difficulties faced by the exporters associations. Till then the existing procedure shall continue. Exporters are free to adopt the new self-sealing procedures on voluntary basis if the readers are in place at the Customs ports/ICDS after 1st October, 2017.
Custodians of ICDs are requested to facilitate the process of receiving handheld readers or installation of fixed readers at the ICDs. In case of unavailability of readers, the same must be intimated by vendors at any ICD by 10th October, 2017.
Conclusion
The Board has sought several clarifications so that the existing practice can be replaced by trust-based compliance systems, strengthening the risk management system. Data integration and ease of reference of the exporters have been kept in mind. The decision to defer the implementation has been a step at the right direction by the Board, so that fewer queries and confusion comes along the way of exporters once the mandatory implementation kicks in. The new procedure is useful for both manufacturer exporters and merchant exporters for hassle-free exports.
1Circular No 26/2017 – Customs dated 1st July,2017 and Circular No. 36/2017- Customs dated 28th August,2017
2Circular No. 37/2017- Customs dated 20th September,2017
3Circular No. 36/2017- Customs dated 28.08.201
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Bhaskar Thakkar
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BT Associates, India
thakkar@btassociate.com
Twenty years of experience in tax practice. Specialist in structuring & planning and tax optimization under indirect tax. Lead eastern India indirect tax practice of Ernst & Young in past.
