Customs EDI, not all that good - CAG
IF you are an importer or exporter, apart from the Customs officers, you have to deal with the erratic behaviour of a software programme called the Indian Customs Electronic Data Interchange System (ICES 1.5).
CAG conducted a Performance Audit on the ICES 1.5 for the year ended March 2013.
The Indian Customs Electronic Data Interchange System (ICES) was developed as the core ICT system through which import and export documents {Bills of Entry, Shipping Bills, Import General Manifests (IGMs) and Export General Manifests (EGMs)} were to be processed. The main objectives of ICES were to ensure uniformity of assessments and valuations; ensure faster processing; reduce transaction cost, interaction of the Trade with government agencies, and provide quick and accurate import/export statistics for compilation by the DGC&IS. ICES Ver 1.0 was initially launched as a Pilot project at Delhi Custom House in 1995. It was gradually made operational at other custom houses from 1997.
ICES 1.5, an upgrade of the original ICES 1.0 Version was rolled out in a phased manner across various customs locations from June 2009. The main features of the upgraded version were a migration from Oracle database 8i to 10g, which runs in an environment with a centralised application having:
1. Multi-locational functionality;
2. Single database with partitions for users to access data only for their location;
3. Centralized maintenance and updating of software.
The overall goal of the Directorate of Systems and Data Management (DoS) is to provide technical support to operations and safeguard resources by strengthening the computing infrastructure of CBEC. ICES was selected for performance audit since it forms the basis for Customs public interface and is posited to leverage the CBEC revenue administration strategy as an operational solution, which is efficient, effective, transparent and reduces transaction cost while augmenting facilitation of the trade. Audit came across systemic issues and issues involving inadequate scoping and functionality of the application. The total revenue implication of this PA report is Rs. 847.16 crore.
CAG Recommends:
1. The department may consider constituting a Steering Committee for developing IS plans according to its business strategy in consonance with its future IS needs.
2. A personnel policy for development of internal competencies for management of the CBEC's IS management, by recruitment, development and training of IT personnel may be developed for smooth operations of the department's mission critical IS systems.
3. Any changes in the operational features of logical security elements like password policy may invariably be implemented only after due authorisation and documentation of the changes.
4. The department may consider examining its core application (ICES 1.5) audited periodically for detecting deficiencies and suggesting improvements in the application. The strategic control must necessarily be with the Government and accordingly, the SLAs may be urgently reviewed.
5. DoS may consider mapping the serial numbers of the RSP notification with the Tariff line items and put in place necessary validations in the application to ensure that the importer declares the RSP, if there are any imports under a tariff line item, covered under the RSP notification.
6. The department may consider the introduction of appropriate validations in ICES Application and RMS to detect the related cases. The facilitation accorded to ACP clients by RMS may also be re-examined, in view of the large volumes of goods cleared at RSPs declared below import cost.
7. To ensure correct assessment, validation checks for declaration of same CETH/CTH may be provided for in ICES 1.5 application, for all goods classifiable under chapters 1 to 98 of the Customs and corresponding Central Excise Tariff Schedules.
8. The proposed Export Obligation Discharge Certificate (EODC) message exchange between the DGFT and ICEGATE has not materialised. The manual transmission of EODCs and their monitoring has not been found to beefficient. However, the data available in the application database may be used to generate EODC discharge failure reports and the licencees as well as DGFT may be pursued, for timely initiation of the revenue recovery procedures related to the EODC.
9. The information regarding provisional assessments, action taken in cases of short levy of duty and duty paid through manual challans may be provided for in the application, to allow updation of the data relating to each of import/export assessment record.
IS
Information System
SLA
Service Level Agreement
RSP
Retail Sale Price
RMS
Risk Management System
ACP
Accredited Client Programme
ICE GATE
Indian Customs EDI Gate Way
Will CBEC listen to CAG's wisdom?