Customs Complications - Board solutions?
RECENTLY Member (Cus & EP) of CBEC, SK Goel chaired a meeting of the Customs Consultative Group in Mumbai. We bring you some of the queries raised and the Member's crisp replies.
Q: Safeguard of CHA Industry: The Government has imposed safeguard duty on various measures to safeguard the domestic industry. Similarly some measures from Government side may please be taken to safeguard the Indian origin CHAs who are facing serious injury due to arrival of various foreign bound service industries into the CHA trade.
Suggestion
++ The Service Tax is same for domestic and foreign based industry. The same may be increased for foreign based service industry to safeguard the domestic industry.
++ Special exemption in TDS or Service Tax may be given to Indian Origin CHAs.
++ Foreign Agencies shall not be allowed to operate CHA business in India and must be restricted to manufacturing activity only under collaboration.
++ Customs Act and CHA Regulations may please be suitably amended/ modified to incorporate necessary provision to grant CHA licenses to 100% Indian Companies/ Indian citizens only.
A: Such requests may not be acceptable in the present circumstances. However, Bombay Custom House Agents Association was advised to send a detailed note in the matter for consideration of the Board.
Q. Administrative control of all EOU units other than port cities was with the Jurisdictional Central Excise. However under Circular No. dt. 07.04.2003 the Board specifically created an exception for Bangalore. With this circular, all EOU / STP / EHTP units was brought under the administrative control of Commissioner of Customs, Bangalore, under his territorial jurisdiction. Now, Commissioner of Customs, Bangalore has issued a Public Notice No. 32/2010 dated 26.05.2010 stating that all EOU units will be shifted from Customs to Central Excise from 31.07.2010 which was issued in pursuance of Board's directions. Bangalore Association has written a letter to Chief Commissioner of Central Excise on 22.07.2010 expressing the difficulties and specially requested the role of CHAs under central excise.
Bangalore CHA Association received reply from Central Excise the request and mentioned that there is no scope for CHA's under central excise Act.
From 2003 to 2010 the number of units have almost doubled and nearly five thousand units are functioning at Bangalore. Accordingly the scope of the business of CHA's also increased to multiple level. By this sudden move by the authorities at Bangalore will certainly deprive the future of nearly fifty to sixty CHA's purely depending on Custom Division activities.
They have finally requested to restore all the EOUs/EHTPs/STP work to the Customs Division at Bangalore.
A: the transfer of control over EOUs from Customs to Central Excise in port cities and Bangalore has been a conscious decision, taken for ensuring a better, more effective tax administration. With this decision all the EOUs in the country are under Central Excise control which ensure not only uniformity in application of laws but also better compliance management. The role of CHAs however,still remains unchanged which is in the area of import / export activities of the EOUs.
We will bring you more clarifications in the next editions of DDT.