New Delhi, June 20 (KNN) A large number  of export consignments have piled up pending ‘100% inspection’ after a new directive to field formation by revenue department to verify the IGST payments for goods exported out of India.

The circular issued by Director (Customs), Department of Revenue of Union Ministry of Finance on 17th June 2019 asks officials to verify the IGST payments.

Ports witness havoc as export goods waiting to be shipped are held-up awaiting clearance from custom officials.

Exporters fear of collateral damage by not meeting shipping deadlines and demurrages for not loading goods on vessels docked at ports.   

Although the circular states that ‘DG (Systems) shall work out the suitable criteria to identify risky exporters’ in practice most shipments are marked for 100% inspection.   

According to one reputed garment exporter whose shipment was help up at JNCH, Nhava Sheva, he was horrified to see the message flashed at terminal: ‘The exporter has a risky profile. Goods to be allowed for export only after 100% examination with respect to criteria viz. classification/ declaration / valuation under SIIB supervision to check undue claim of export benefits including undue GST refunds before sanctioning let LEO. IGST refund in the case not to be granted without proper verification. Consignment may be contain miss-declared and/or over-valued items’!

According to Dr Animesh Saxena, President of Federation of Indian Micro and Small & Medium Enterprises (FISME)- the premier MSME body, ‘post directive, like a knee-jerk reaction, officials at ground are literally inspecting all consignments and as there are not adequate inspectors, the consignments are piling up’.

‘India already has a tardy reputation for not meeting tight shipment deadlines and that is why large buyers prefer Bangladesh or Vietnam.  Such episodes create uncertainty and do irreparable damage to exporters who are part of Global Value Chains’ he added.  

Questioning the wisdom of holding up most shipments, he asks why on earth, for example, an exporter would inflate prices while shipping to US where garments attract almost 18% duty.  The fraudulent cases are confined to a only a handful of markets which have negligible import duties and Customs officials are well aware of them.     

FISME is submitting to the Board that the problem should be narrowed down to specific countries and exporters and rest of the export consignments should be allowed cleared hassle free.  

Today, Government has issued clarification that only a small number of shipments have been held up. But reports from ground cite backlog and delays due to the sudden inspection spree. (KNN Bureau)