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Stricter import scrutiny from 21st Sept

From September 21, the government will enforce tougher customs rules for a broad range of imports, including of mobile phones, set-top boxes, camera and various white goods. The move is being designed to curb abuse of its free trade agreements (FTAs) with trading partners by unscrupulous elements. Speculations have been ripe for quite some time now that China may be diverting its supplies to India through Asean nations, abusing rules of origin, to illegally take advantage of duty-free market access under the FTA.

Singapore, Hong Kong and Vietnam have emerged as Asian trade partners which counts on massive Chinese investments. For example, India’s trade balance with Vietnam swang from a surplus of US$ 2.8 billion to a deficit of US$ 2.2 billion. Similarly, India’s tradegap with Asean has increased  from US$ 5 billion in 2010, when the FTA with Asean was implemented, to over US$ 22 billion now.

The budget had introduced a change in Section 28DA of Customs Act that relates to procedures regarding claim of preferential rate of duty. Likewise, the revenue department last month stipulated that the importer or his agent, at the time of filing bill of entry, has to make a declaration that the purchased items qualify for preferential duty, and also produce certificates of origin.

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