In a bid to enhance industry understanding and compliance, the Global Trade Research Initiative (GTRI) has urged the Central Board of Indirect Taxes and Customs (CBIC) to simplify the complex language used in its notifications regarding customs duties. GTRI emphasized the need for communication experts to assist in drafting easily comprehensible notifications, providing crucial details for businesses navigating the intricacies of import duties.
Key Recommendations by GTRI
- Communication Expertise for Clarity: GTRI suggested that CBIC enlist the services of communication experts to streamline the language in notifications. This move aims to empower industries to better comprehend the orders that hold pivotal information, fostering a more accessible interpretation of the regulations.
- Ease of Doing Business: Simplifying the language in CBIC notifications is envisioned to benefit over a lakh firms engaged in importing merchandise, exceeding USD 660 billion in 2023. GTRI asserted that this effort will incur zero cost to the government while significantly contributing to the ease of doing business in India.
- Importance of Clarity in Notifications: CBIC's role in notifying import duties is crucial, and GTRI highlighted the challenge posed by the complex language. Firms, while obligated to pay import duties as per CBIC notifications, face difficulties due to convoluted language and the unintentional omission of complete details necessary for understanding the duty or import conditions.
- Enhanced Transparency: GTRI emphasized that using simple language in notifications would enhance transparency in tariff and other notifications, providing clear and concise information for businesses to navigate.
Challenges Posed by Complex Import Duties
- Varied Duty Components: Import duties in India encompass various components, including basic customs duty, social welfare cess, Agriculture Infrastructure Development Cess (AIDC), and IGST. The complexity arises as the total duty is calculated using a specific formula, making it challenging for businesses to determine the correct duty payable.
- Cross-Referencing Difficulties: GTRI cited an example where a company importing tennis shoes needed to navigate through multiple notifications to understand the total duty payable. The convoluted cross-referencing process makes it challenging for businesses, especially small firms, to determine the accurate customs duty for their products.
GTRI's Recommendations for Improvement
- Non-Technical Language: GTRI suggested the use of straightforward, non-technical language in CBIC notifications to eliminate the need for cross-referencing and facilitate better understanding.
- Clarity in Relevant Products and Duties: The initiative proposed that CBIC clearly state relevant products and corresponding duties in each notification to avoid confusion among businesses.
- Comprehensive Approach: GTRI recommended adopting a comprehensive approach, similar to the Directorate General of Foreign Trade (DGFT), to compile all duty-related information under various conditions into a single notification. This would ensure that each notification is complete in itself, simplifying the compliance process for businesses.
Conclusion
Implementing these suggestions, according to GTRI, would significantly enhance the effectiveness of CBIC notifications. Clear, direct, and comprehensive communication is seen as the key to ensuring compliance and ease of interpretation, ultimately fostering a more business-friendly environment.
CAclubindia
