Arun Sahu
Director General, Systems and Data Management, Central Board of Excise and Customs

Information technology (IT) and information technology enabled services (ITES) find a central place in India’s ongoing trade process reforms. The IT initiatives of Central Board of Excise and Customs (CBEC) received a boost when the Cabinet Committee on Economic Affairs (CCEA) cleared a major IT consolidation programme in 2007. Initially, we had stand alone systems for each Customs location, but the government sanctioned $134 million to create a consolidated computing infrastructure for Customs, Central Excise and Service Tax applications for all locations. The objective was to provide better service levels to the trade and also help the department maintain a comprehensive and responsive information system.

Over the years trade process reforms facilitated by IT have expanded with greater alacrity and service motivation. The department continuously evaluates feedback from its core customers especially trade associations and tries to upgrade service standards while adding new facilities. Given the fact that its customers are knowledgeable, demanding and informed, the department has to continue to improve upon its past laurels.

What are the key benefits of automation? At the outset, IT initiatives have contributed to faster clearance of cargo, reduced discretion of officers, better systems for grievance redressal; most importantly it has led to a reduction in dwell time across sea ports and at all air cargo points. The same is getting passed to the customers; therefore there is a spin-off effect.

Every challenge is also an opportunity and it is due to smart governance practices adopted within the department that even with a small staff strength, the Directorate of Systems has managed to transform the manner in which the CBEC efficiently runs the business and ensures service levels at all times

There are other important benefits from the e-governance initiative in Excise and Customs. When we look at core issues such as return filing and scrutiny, payments and intimations and approvals of departmental officers they have been integrated and brought under the workflow processes of ACES (Automation of Central Excise and Service Tax) system. This is helping us to take quick decisions on many contentious areas. However, other functions such as adjudication or any such activities which involve fair degree of human judgment are continued to be done by the officers. Today we have developed a database for Ministry of Finance and other Ministries. Through the use of IT enabled analytics; data and information could be made available to the policymakers to assist in formulating informed policy decisions for revenue planning,

In terms of coverage and reach, at the automated locations, 97 per cent of the export and 98 per cent of the import documentation is processed electronically. In 2002, We could handle just about 2 million declarations in 2002. This has gone to about 12 million now. The complexity of the EDI system can be gauged from the fact, that on each declaration, at least 4-5 agencies (CHA, Custodians, Banks, Regulatory Agencies, carriers and logistic operators etc.), have to work in real time to clear it.

There has been noticeable change in the degree of participation among certain departments and agencies. Customs IT systems has made possible government departments like Phyto-sanitary, Food Safety and Standards, Drug Control authorities to be part of the custom clearance system. In short, we are reaching a point of convergence where we can reduce or even eliminate duplication of data and achieve a more effective trade facilitation.

On its own, the CBEC has taken a number of steps to improve information and communication technology infrastructure. In 2002, a major programme called ICEGATE was launched to facilitate remote filing of import and export declarations by the importer and exporter through the ICEGATE portal. On an average, more than 30,000 declarations are being filed daily using the ICEGATE portal. All the declarations are processed by ICES (Indian Customs EDI System) application. For instance, all the airlines are filing their import and export manifests using this system. Also, there are options for a document tracking system that can aid any users to know the latest status of their document on the Internet. To further improve the process and make it trouble free, we have set up a risk management system, which is IT driven. Risk Management System offers a greater degree of facilitation to the traders and would contribute towards reduction in the dwell time of cargo and thus to transaction cost. Further, CBEC has also launched e-payment and online registration for Intellectual Property Rights. Again, to ensure privacy protection, authenticity and reliability of the transactions, CBEC has adopted international security standards and it is first in the Government departments which has been certified compliance to ISO 27000 standards. More importantly, CBEC has gone on to set up a Customs Data Warehouse (CDW) to store data which may be made available in a standard format for any investigation or analysis, reporting and so on. In short, we have made major strides as far as e-governance is concerned.

Challenges

Continued improvement in taxpayer services and a more efficient delivery mechanism is both a constant goal and challenge. In order to address trading community’s expectations and queries, we have created a robust feedback system from all stakeholders so as to constantly improve the clearance process.

Like any other progressive and forward looking IT implementation, we too have a huge challenge of migrating various data into the IT system. While we have addressed many of them, still a plenty of such data issues have to be settled including data quality and accuracy. Implementing EDI and digitising information coming from small ports, land borders and other Customs locations, which is largely in paper format, remains a challenge for us till today.

Information technology provides an opportunity to move to a scenario where an export declaration made in another country, can be recognised as an import declaration in our own country as well. The Authorised Economic Operators Programme provides a secure and increased facilitation and a mechanism to Indian Importing and Exporting Community to maintain their international competitiveness. Here, you have to develop mutual recognition agreements with other countries.

Implementing EDI and digitising information coming from small ports, land borders and other Customs locations, which is largely in paper format, remains a challenge for us till today

Needless to say every challenge is also an opportunity and it is due to smart governance practices adopted within the department that even with a small staff strength, the Directorate of Systems has managed to transform the manner in which the CBEC efficiently runs the business and ensures service levels at all times. The Directorate can justifiably claim to have built confidence and trust of the EXIM community in transacting business on-line, in providing improved quality of service and customer satisfaction.