Indian Customs EDI System (ICES) initiated a new era in the country.

An era of :

• Paperless Trade.
• Trade facilitation rather then control.

An era in which Indian trading community can exchange documents electronically with Customs and other
Government Agencies.

This had been made possible by the joint design, development

and implementation of ICES by the officers of
Central Board of Excise and Customs and National Informatics Centre.

Project History
Objectives
Overview of the System
Benefits from the Project
Technical Overview

Functional Overview
Customs EDI Community System

Project History

The Customs Computerization project is the outcome of a systems study conducted by National Informatics
Centre and Central Board of Excise and Customs in December, 1992 at number of Customs Houses throughout
the country. A more detailed requirements study at the Delhi Custom House in April, 1994 formed the basis for
the software requirements of ICES.

The pilot project was launched in the year 1994-95 at Delhi Customs House which included Electronic Data
Interchange(EDI) as a key element for connecting all the players involved in international trade with the Customs
House electronically.After the successful implementation at Delhi Custom House, the Customs decided to extend
theservice to other customs houses. ICES was made operational for exports processing at Inland Container
Depot, Tughlaqabad in August, 1997; Sahar Air Customs, Mumbai in November, 1997; Jawahar Lal Nehru Port
Trust, New Mumbai in November, 1997; Chennai Air Customs in December, 1997; Bangalore Air Customs in
Feburary, 1998; and Container Freight Station, Patparganj in March, 1998. Right now, the system is operational
at 23 sites throughout the country.
More modules like Transshipment, Warehouse, Bonds etc were designed and implemented in steps.

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Objectives

The main objectives set for Indian Customs EDI System by the Customs were:

Respond more quickly to the needs of the trade

Computerization of customs related functions including import/export, general manifest control, ex-bond
clearance of warehoused goods, goods imported against export promotion schemes, monitoring of export
promotion schemes.

Reduce interaction of the trade with Government agencies

Provide retrieval of information from other custom locations to have uniformity in assessment and valuation

Provide management information system for policy making and its effective revenue and
pendency monitoring and

Provide quick and correct information on import/export statistics to Director General of Commercial
Intelligence and Statistics

The guiding principles for the officials of Customs and National Informatics Centre while designing the ICES
system were:

Facilitation: While ensuring proper enforcement of Customs laws and regulations, Customs Administration
should strive to improve facilitation of Customs clearance procedures.

Accountability: Customs Administration should be accountable for their actions through a transparent and easily
accessible process of Administration and/or judicial review.

Consistency : Customs laws, regulations, administrative guidelines and procedures should be applied in a
uniform manner.

Transparency: Customs laws, regulations, administrative guidelines and procedures should be publicly available
in a prompt and easily accessible manner.

Simplification: Customs laws, regulations, administrative guidelines and procedures should be simplified to the
extent possible so that Customs clearance can proceed without undue burden.
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OverView

The objective was to roll out systems and processes that improve the way the business is conducted.

ICES system is not only a technology solution but it transformed the way business was done.

ICES comprises of two main sub systems namely, India Customs EDI system/Imports (ICES/I) and Indian
Customs EDI System/Export (ICES/E).

ICES/I for processing of Bill of Entry; and ICES/E for processing of Shipping Bills. The Exporters, Importers and
Custom House Agents (CHAs) transmit Bills of Entry, Shipping Bills and other related documents such as
Invoice, Packing List over dial-up links to the NICNET EDI Server which, in turn, submit them to Customs
computer system for clearance. The trading community is not required to travel physically to the Custom House
for submitting the documents except at the last stage for physical examination of goods, and for taking delivery.

The Custom House Agents use the Remote EDI System (RES) which is a standalone software package for
preparation of Bill of Entry and Shipping Bills and other related documents. It has been developed by NIC as part
of Indian Customs EDI System. The documents transmitted electronically over NICNET are submitted to
Customs Computer System for further processing.

ICES/I consists of the following main modules:

Import General Manifest Bonds

Service Centre Licence

Appraising Baggage

Audit Systems Manager

Assistant Commissioner MIS

Cash Ex-Bond

Examination

Transshipment
 DEPB/DEEC/100% EOU

Import General Manifest

ICES/E consist the following modules:

Service Centre Examination

Duty Drawback Assistant Commissioner

Additional Commissioner Preventive Officer

Licence Export General Manifest

Systems Manager MIS

Main features of the system are:

Security
ICES provides for security at all levels of access to the system. At the Service Centre. Security features are
implemented at module level. System keeps track of any transaction carried by an user.

Help
System includes powerful help features which can be invoked by the Assessing Officers from their respective
screens to facilitate their assessment work.

Management and Control

ICES allows the Collector to find out the status of any document in the system. Controlling Officers can monitor
the progress of the Customs Officers in processing the documents and provide help in expedite the process.
Number of documents cleared at each stage can also be monitored.

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Benefits

Improved customs clearance and inspection procedures is generating faster, more certain and, ultimately, less
costly trade transactions.
Computerization of customs procedures resulted in time and cost savings due to the reduced need to prepare,
handle, store and deliver customs documentation.

Improvements in communications, access to information and the transparency of customs processes and appeals
increased the level of certainty and fairness.

A good compliance track record resulted in faster clearance and less intrusive verification techniques.

Importers know the amount of duties and taxes owing as a result of the clear and consistent rules. More efficient
clearance will produce time and cost savings and provide the certainty required to exploit modern business
practices such as “just-in-time” inventory.

Exporters benefited from having similar customs rules and procedures apply across the international market, thus
increasing market access opportunities, while reducing costs and complexity.

Customs Brokers have the opportunity to refocus their services from dealing with forms and complexity to using
their expertise and knowledge to bring a new range of professional services to clients operating in an expanding
and evolving trade market.

Carriers benefit from faster service, lower costs and the ability to use their equipment to its utmost capacity rather
than having it delayed at Customs.

Operations

Fully automated process with little or no intervention by either party providing a virtual on-line scenario

Declarations can be accepted round the clock automatically, resulting in maximum productivity

Quicker retrieval of cargo through reduction of clearance times

Reduction in manual administrative processes resulting in fewer errors and no duplication

Harmonised business relationships with other bodies such as Ports, DGFT, Airlines, Container Depots etc.

Time Saving

Notification of releases are speeded up as a result of the electronic releases being generated automatically

No capturing of the release required by the client

Communication errors reported and communicated electronically to client

Data Accuracy

Electronic messaging has the proven advantage of minimizing data capture which in turn ensures less errors and
quicker releases

The accuracy of data received can be incorporated into clients Track and Trace

Cost Effectiveness

Cost on processing the documents has come down drastically.

Security and Risk Management

Security is very vital when submitting information electronically. To compound this basic assumption, the risks of
diminished value in the real world are nothing compared to the risks of loss in the virtual world.

Customs in particular face issues such as fraud and theft in their standard business practice and they realize the
need for a secure system.

Scheduled auditing practices within the system ensured that to ensure that security is being implemented
effectively customs have made sure that the security requirements. The client can be sure that their message
information will not be tampered with.

Cargo Handling

Electronic clearances provide quicker cargo releases, resulting in more efficient deliveries

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Technical

Indian Customs EDI system is developed for better management of Custom Activities. The existing processes
were analysed in depth for re-engineering and improvement. The main achievements of the system are simplified
and harmonized procedures which has not only provided efficient and reliable environment to the customs but also
to the business communities and other agencies involved in the trade. The business processes of the customs
and the trading partners along with their boundaries and interfaces were analyzed in depth and reengineered from
the viewpoint of

Higher efficiency

Customer satisfaction

Lower Cost

Facilitation

Lower inventory level

Reduced turn around time

The main objectives while re-engineering the procedures were:

 All the agencies of the government should present a single face to the user

Data once captured should be available for all the government agencies

The Importer/Exporter or their agent should interact with only one agency

Gradual transition from scrutiny of paper documents

System Appraisal for select import goods

Minimized export appraisement

Examination waiver - Green Channel

Electronic credit of drawback

Reduced documentation for export cargo

The Indian Customs EDI application is running on Sun Solaris Operating System (V.2.5/2.6) and the database is
Oracle (V.7.1/7.3). Each Customs station have stand-alone servers for running the ICES application. The data at
present is locally stored on these servers.

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Functional

A. Document Preparation and submission

Indian Customs EDI System can accepts the documents from the trading partners in the Electronic Format. The
documents can be prepared and submitted using either the Electronic Data Interchange or Service Centre. The
Importers/Exporters and Custom House agents can use the Graphical User Interface based package “Remote
EDI System” implemented using Visual Basic/Oracle 8 from their offices to create the documents in the desired
format and then transmitting them over the Internet using the secure server of NIC for submission at customs
house for further processing.

The document received over the Internet at Custom house is then loaded to the ICES after the proper validation
checks.

Importers/Exporters and CHA’s who do not have access to Internet can get their documents electronically
prepared and submitted for further processing at the Service Centre. The Service Centre module of NIC running
on powerful Sun machine under Oracle 7.0 allows entry of data, modifications and submission.

The data entered through EDI or Service Centre gets validated before their storage into ICES. If errors are found,
the same are reported to the Importer/Exporter/CHA through EDI or at the Service Centre.

B. Indian Customs EDI System

Documents once entered and submitted are then reviewed by different officers of the Custom House at various
stages of processing and final clearance is accorded on the computer system after all the formalities are over for
physical examination of the goods at the Sheds. ICES keeps track of the officers who have handled the
documents at various stages of processing. The trail of the processing cycle is available to superior officers at any
time. The CHA, in turn, can enquire about the status of his documents from his own system. He can view any
memo or objections on his documents as they are posted in the system.

Indian Customs EDI System : Imports

The Bill of Entry is to be filed through the Service Center by the Importer/CHA, who has to submit the signed
declaration in a prescribed format along with copy of Invoice and Packing List if filed through Service Centre. The
document can also be filed through the Remote EDI System.

After the data entry at the service center, a "Check List" is generated which is to be verified by the Importer/CHA
and corrected in case any error is detected and the signed "Check List" is to be submitted in the Service Center. In
case of RES, the system validates the data and if errors are found, a message is sent back to the party. If the data
passes the check, system accepts the data and an acknowledgment is sent to the Importer/CHA.

The Bill of Entry then appears in the screen of the respective Group Appraiser. The Group Appraiser then
assesses the Bill of Entry on the system and marks it to the Audit Appraiser. After the Audit is complete, the Bill of
Entry appears in the screen of the concerned Group Assistant Commissioner. After the assessment is approved
by the Asstt. Commissioner concerned, TR-6 is printed at the Service Center for payment of duty. The
Examination Order is also printed along with the TR-6 Challan.

If the Appraiser does not agree with the importer regarding tariff classification / notification / declared value etc., he
can raise a query in this regard. The Importer/CHA has to enquire at the Service Center whether there is any
query in respect of their Bill of Entry and should reply to the same through the Service Center if there is any.

The duty is to be paid through the designated bank.

After payment of the Duty, the Bank enters the same into the system at a terminal at their end. Then the Bill of
Entry appears on the screen of the Appraiser (Docks). The Importer/CHA should present a copy of the B/E
alongwith duty paid challan and other documents including invoice, packing list etc. at the time of examination of
the goods.

The Shed Appraiser shall examine the goods and enter the examination report in the system. After the
examination of the goods is complete, the Appraiser (Docks) would give the "Out of Charge" order on the system.
Thereafter, the system will print two copies of B/E for the importer and the Exchange Control Copies.

In case of any discrepancy found in the docks with respect to the goods, the same is reported to the respective
Group through the system with the comments of the Dock Officers. On the basis of the examination report and the
comments of the dock officers, the Group may revise the assessment or may raise a query.

Indian Customs EDI System : Exporters (ICES/E)

 Before filing any Export Shipping Bill, all exporters and CHAs are required to register with the Customs EDI
System their IEC Code No., CHA Licence No. and Authorised Dealer Code No. of the Bank through which export
proceeds are to be realised.

Those intending to file the Shipping Bill will have to present at the Service Center a declaration in the prescribed
format signed by the exporter or his authorised CHA alongwith the copy of Invoice and Packing List.

After the data entry at the service center has been done, a "Check List" will be generated and handed over to the
CHA/Exporter who should verify the correctness of the data entered. If any error/mistake is detected by the
CHA/Exporter in the data, they should inform the Service Center operators who will make the corresponding
correction in the data accordingly.

After the correct data has been entered into the system, the Shipping Bills shall be processed automatically by the
System on the basis of the declaration made by the Exporters. However, the following categories of Shipping Bill
are assessed by the Assistant Commissioner (Export):

(a) Shipping Bills where the FOB value is more than Rs. 10 Lakhs.

(b) Shipping Bills relating to free trade samples whose value is more than Rs.20,000/-

(c) Drawback Shipping Bills where drawback amount is more than Rs. 1 Lakh.

The status of the Shipping Bill can be checked by the Exporter/CHA at the Service Center. They should also check
whether any query has been raised in respect of their Shipping Bill. In case of any query, they should file a reply to
the query through the Service Center.

During examination of the goods at the docks, the CHA/Exporter has to present the Check List alongwith all
original documents such as Invoice, Packing List etc. to the Customs Officer. "Let Export" order will be given by
the Appraiser if everything is found to be in order after examination of the goods and scrutiny of the documents.

After the "Let Export" order is given, the printout of the Shipping Bill is generated. The examination report printed
on the Shipping Bill is to be signed by the Appraiser, Examiner as well as the CHA/Exporter. The name and
Licence No. of the CHA should be clearly mentioned below his signature.

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Community

As mentioned, the main objective of introduction of EDI in International trade was to move away from customs
controls to trade facilitation. Number of parties, most of which are government agencies, are involved in a trade
transaction. NIC submitted a re-engineering proposal in 1998 to the Customs, which is subsequently
implemented. The main features of the system are :

Integration of the agencies involved in a trade transaction.

All the agencies presenting single face to the customer

Customer interact with only one agency as far as possible

Data once captured made available to other agencies.

This has been achieved primarily by re-engineering the processes of these regulatory agencies involved. The
internal functions of these agencies are automated and are made EDI capable. The inter-agency data files are
automatically transferred and received by the system and act upon the messages received and the response
messages are generated.

The main agencies other than Custom House and CHA/Importer/Exporter integrated into the Customs EDI
Community System are

• Directorate General of Foreign Trade

• Airport Authority of India

• Apparel Export Promotion Council

• Export Promotion Council(EPC)/Commodity Board

• Airlines

• Port Authorities
• Shipping Lines and Shipping Agents

• Inland Container Depots

• Container Freight Stations

• Banks