‘ROLE of CFS in INDIA – Import & Export’

All Cargo imported into the country or exported out of the country by sea, air, land or rail routes are governed by the provisions of the Customs Act, 1962 and other laws of the country related to the country. Customs ensures that the import and export of goods are in compliance with the Customs Act and other laws in force. Accordingly, customs procedures are intended to provide definite, predictable methods by which the goods can enter the country and get cleared on payment of applicable import duties, fulfilling the requirements of the law of the land.

To regulate and to exercise effective control over import and export activities, goods are allowed for import/export at notified places under section 7 of the Customs Act, 1962. Custodians are appointed under section 45 of the Customs Act, 1962 for safe storage of goods till they are cleared for home consumption or warehoused. Clearance of goods involves classification, assessment, examination and payment of Customs duty on imported cargo on the basis of Bill of Entry presented by the importer or his authorized agent. The Central Board of Excise and Customs (CBEC) have prescribed the procedures through notifications, rules, regulations and circulars which are implemented by field formations. These are updated and modified according to the need, demands of trade and to improve the efficiency of the system.

CFS is a place where containers are stuffed, de-stuffed and segregation of export/import cargo takes place. With the growing volume of international trade, the need for expeditious clearance of goods at the port within the minimum possible time has been gaining importance. This is more so when the ports are facing congestion at their premises. Further, for optimal utilization of existing infrastructure (space, equipment), the goods that land at ports need to be evacuated straight away without any loss of time. Accordingly the concept of Container Freight Stations, (CFS) has grown in importance along with the development and growth of ports.

A CFS is an extended arm of Port/ ICD where import/ export goods are kept till completion of their examination and clearance. The imported goods can be immediately shifted from the port to CFS which also helps in the reduction of port congestion. All the activities related to clearance of goods for home consumption, warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export and transshipments takes place from such stations. 

Therefore, clearance of goods from CFS is an important point of consideration for trade in respect of export/ import Cargo as it is the final Customs contact point.

The goods received at ports are brought to CFS and stacked for customs and examination for deliverance to consignee. In respect of import consignment, the Steamer Agents/liners/ Importers desiring to take the consignment to CFS, file Import General Manifests in the port. After obtaining the permission from the AC/DC, the Container moves to CFS under Customs escort or under bond and bank guarantee. The CFS allow de-stuffing of the goods. The CHA / importer files the Bill of Entry at Customs House and then Customs formalities of assessment, examination and payment of duty are completed. Thereafter, Customs gives “Out of Charge” and the Custodian releases the goods from CFS by issuing a Gate-Pass.

In respect of exports, the goods are brought directly to CFS under a Shipping Bill. The export cargo in Less than Container Load (LCL)/ Full container Load (FCL) is received by the Custodian of CFS for safe custody. After stuffing of the goods, Container/ Customs Bonded Truck (CBT) is sealed by the Custom Officer and the same is removed from CFS for export through the terminal.

The Inter Ministerial Group (IMG) noted that the Department of Revenue has already taken certain significant steps in the area of facilitation of the trade and simplification of procedures. There is a permanent Action Group on Trade Facilitation which recommends simplification of customs procedures leading to reduction of dwell time in cargo clearances. This group also provides inputs for Trade Facilitation Negotiations at the WTO  The Action Group has since its inception, made The recommendations on which the CBEC has already issued instructions with the overall objective of reduction in dwell time and simplification of procedures:-

1. Direct clearance facility of containers from the ports, without the need for transshipping them to CFS/Customs areas provided to Importers availing Green Channel facility.
2. Reducing procedural formalities at airports by dispensing with the permission required from Customs for palletization of cargo.
3. Imposing penalty on incorrect and incomplete filing of import manifest/ report with the objective of reducing dwell time of cargo.

The overall goal should be to release about 70% of the consignments on the basis of system appraisal and without examination of the cargo. This should be achieved within six months of the full implementation and should be monitored by the CBEC. Regular periodic monitoring should be done by CBEC for further enhancing the facilitation measures.

A faster delivery system needs to be put into place by creating a separate area in the port premises clearly earmarked for immediate delivery of cargo to the specified accredited importers. The proposed arrangement would enable accredited importers to move out their containers without necessarily going through a C.F.S.

Thus, the recommendations made by the Inter Ministerial Group (IMG) in the present report will bring about an efficient and facilitative environment for expeditious Customs clearance of cargo.