Exporters Fear Inspector Raj in Garb of Onsite Audit

Finmin proposal seeks to ensure exporters don't fudge data once country adopts law on zero interface with Customs

Exporters have opposed a finance ministry proposal of on site audits at the premises after their consignments are cleared, a move that they claim would let lose the menace of inspector raj. The finance ministry wants to put in place a stringent system of audit to ensure exporters do not fudge data to corner benefits once the country shifts to a globally prevalent system of zero interface with customs authorities. The new system proposed by the Central Board of Excise and Customs will be implemented as soon as it is notified in the official gazette. Commerce department officials say that they would take up the issue with the finance ministry to know why such an audit was necessary. "We will certainly talk to the finance ministry and try to find out the reason behind such a move, "commerce secretary Rahul Khullar told ET. Experts feel the current system will increase the compliance burden on exporters. "Introduction of post clearance audit by the customs would entail evaluation of current processes and documentation to and export of goods, including declarations made by companies that would need to put in place a robust system to meet the audit requirements, "said Pratik Jain from KPMG. An importer or exporter, who contravenes any provision under this new system, will be liable to a penalty of up to.50,000.More than the monetary penalty, exporters are apprehensive that the new rule will lead to harassment and waste of time and energy. "We submit all documents to customs officials at the time of export and import. They can carry out any check at that time. Why bother us afterwards "asked S P Agarwal, president, Delhi Exporters Association.
Visits by inspectors are likely to be more taxing on small exporters who do not have accounting staff and maintain records on their own. "We will have to stop our work when inspectors visit and supply them with documents that they demand, "Agarwal said that the industry's interaction with inspectors has been less than pleasant. The association has voiced its concerns to the commerce department. "We have been promised support, "Agarwal said. The proposed move may also be seen as going against the commerce departments drive to lower transaction costs through cost-cutting and facilitation measures



Economic Times, New Delhi, 23-08-2011