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According to officials, Finance Minister P Chidambaram has asked the Central Board of Excise and Customs to focus on procedural simplification in Customs.
In the last fiscal, the National Democratic Alliance government had simplified excise tax procedures, and it is felt that the Customs department has considerable scope to straighten out its procedures.
The measures are intended to plug the leakage of indirect tax revenue that the ministry suffers due to lack of uniformity in the rules for cargo valuation meant for exports. Exporters are entitled to claim various types of incentives from the government based on the value of exports.
The officials said exporters often resorted to over-invoicing of their consignments to claim higher incentives. For valuing goods, Customs officials use estimates of the prices of the goods concerned
In bulk consignments, prices are often negotiated and there is often a substantial difference between the quoted domestic and international market prices and the actual prices of the goods. Besides, lack of uniform procedures also makes the valuation process arbitrary.
Estimates by the Comptroller and Auditor General show the government has forgone Rs 24,799 crore (Rs 247.99 billion) Customs duty on account of export incentive schemes.
This is about 62 per cent of the total Customs duty of Rs 40,096 crore (Rs 400.96 billion) realised. In 2000-2001, the duty forgone was Rs 20,705 crore (Rs 207.05 billion), or 43 per cent of the Customs duty collection of Rs 47,615 crore (Rs 476.15 billion).
The officials said the introduction of the electronic data interchange across Customs houses could solve the problem to a certain extent by reducing the control weaknesses in the Customs procedures. They said it was possible for the department to introduce the modifications ahead of the Budget.