Page 62 - ELT_1st August 2020_Vol 373_Part 3

A100 EXCISE LAW TIMES [ Vol. 373

Sector-specific assessment
Despite digitisation and streamlining, disparities in assessment prevailed
due to interpretation issues. Consequently, unhealthy practices like mis-
declaration and port shopping led to disputes and litigation. In this context, an
acute need was felt within the Customs Department to provide uniformity in
assessment practices and assurance of certainty, consistency and standardisation.
To achieve these goals, the C.B.I. & C. intends to form virtual ‘National Assess-
ment Commissionerates’ (NACs). Each NAC will specialise in a broad industry
sector to build expertise in classification and valuation, as well as industry prac-
tices in that specific domain. For instance, if there is an NAC for the automobile
sector, then the Customs automated system will randomly assign all non-
facilitated bills of entry for the sector across the country to different officers. Af-
ter the importer digitally signs and uploads the required documents, the officers
belonging to the respective NAC will be able to expeditiously process the same
and ensure correctness and uniformity in assessment.
In case there is still a necessity to physically examine the imported
goods, the NAC can get it done with the help of the jurisdictional port Commis-
sionerates (JPCs) in the respective Customs locations. The role of the newly in-
troduced Turant Suvidha Kendras would be critical to the execution of faceless
assessment.
Such an innovative change in Customs assessment procedures calls for a
strategic realignment of roles and responsibilities with legislative backing, re-
engineering of IT systems, and, more importantly, a reorientation in the mindset
of all stakeholders. Anonymity and absence of physical interaction would do
away with rent-seeking behaviour. However, a secure official interface would
still be needed for sharing documents.
The challenge lies in streamlining and monitoring the interaction pro-
cess. Several other connected procedures pertaining to valuation of related-party
transactions, post-clearance audit, review and appeal need to be revisited. Also,
the C.B.I. & C. should refrain from reopening the assessment practices adopted
by these NACs, except in rare cases such as fraud or misdeclaration.
The first phase of faceless assessment has just commenced in Chennai
and Bengaluru and the results need to be analysed before a pan-India rollout.
Even in Developed Economies like the US, a similar initiative was run on a pilot
basis to assess the risks and problems. The US Customs and Border Protection
(CBP) started off with two Centers of Excellence and Expertise in 2012. One was
formed in Detroit for automotive and aerospace sectors and another in Houston
for petroleum, natural gas and minerals sectors. Eight more centres were estab-
lished later.
The key takeaway from the CBP experience is the mutual trust and cross-
learning that arose from close interaction with the industry groups. The C.B.I. &
C. would do well to kickstart sector-specific Customs Consultative Groups with
support from industry groups to nurture the NACs. Over time, these NACs will
develop into a pool of domain-specific expertise.
Faceless assessment heralds a paradigm shift in the CBIC’s endeavour to
help India become one of the top 50 countries in the World Bank’s ease of doing
business rankings.
[Source : S. Ramesh in Business Line, Chennai, dated 22-7-2020]

EXCISE LAW TIMES  1st August 2020  62