Circular No. 8/2019-Cus.
F. No. 450/146/2018-CusIV
Government of India
Ministry of Finance
(Department of Revenue)
(Central Board of Indirect Taxes & Customs)
New Delhi, dated the 26
th
February 2019
To,
All Principal Chief Commissioners/Chief Commissioners of Customs/Customs (Preventive)
All Principal Chief Commissioners/Chief Commissioners of Customs & Central Taxes
All Principal Commissioners/Commissioners of Customs/Customs (Preventive)
Subject: Issues related to carriage of coastal cargo from one Indian port to another
port in foreign going vessels/coastal vessels through foreign territory-
regarding.
Central Board of Indirect Taxes and Customs (CBIC) has received references in
relation to different issues concerning coastal movement such as movement of coastal goods
through foreign territory, use of EXIM containers for carrying coastal goods, use of local or
domesticated containers for transportation of EXIM cargo.
2. The issues have been examined by the Board and after careful consideration, it has been
decided as follows:
2.1. Movement of Coastal Goods through foreign territory of Sri Lanka &
Bangladesh:
(a) Kind attention is invited to Sea Cargo Manifest and Transhipment
Regulations, 2018. The said regulations, inter-alia, provide for the procedures
for transit of coastal goods through the foreign territory of Sri Lanka and
Bangladesh. These regulations envisage a completely automated platform for
the movement of coastal goods through the designated foreign territory or
otherwise. Ministry of Shipping (MoS) and Indian National Shipowners’
Association (INSA) have requested to permit the movement of coastal goods
transiting through Sri Lanka or Bangladesh prior to coming into the force of
the said Regulations. CBIC has decided to consider the request of MoS &
INSA.
(b) The procedure for transit of imported as well as indigenous goods through
foreign territory has already been laid down in Transportation of Goods
(Through Foreign Territory) Regulations, 1965. However, unlike the Sea
Cargo Manifest and Transhipment Regulations, 2018, the country names i.e.
Sri Lanka and Bangladesh are not specifically mentioned. While the
procedure for movement of imported goods/export goods is streamlined,
certain difficulties have been expressed in the case of movement of coastal
goods through foreign territory, more so where the coastal cargo is non-
containerised. These difficulties mainly relate to documentation as such
goods would be required to follow the procedures prescribed for coastal
goods as well as the procedures in Transportation of Goods (Through Foreign
Territory) Regulations, 1965.
(c) Therefore, with a view to promote the movement of coastal goods through
foreign territory, CBIC has decided to harmonise the procedure for
movement of Containerized Coastal Goods, or vehicles and other class of
non-containerised Coastal Goods to be specified from time to time (herein
after referred as coastal goods), whether or not calling at any port in these
countries, subject to the following conditions:
Procedure:
(i) The consignor of the coastal goods intended for movement from one port
in India to another Indian port through the foreign territories of Sri Lanka
or Bangladesh, as well as person-in-charge of the vessel shall follow the
procedure stipulated in Transportation of Goods (Through Foreign
Territory) Regulations, 1965. The consignor of the said goods shall not be
required to file the Bill of Coastal Goods (Refer Notification. No. 424/76-
Cus., dated 23-10-1976 as amended) for the said goods. Bill of Coastal
Goods shall, however continue to be filed where the vessel is carrying
both coastal goods and EXIM cargo from one port in India to another
Indian port without transiting through any foreign territory.
(ii) In the Appendix A and Appendix B of the Transportation of Goods
(Through Foreign Territory) Regulations, 1965, wherever the consignor
and consignee name are figuring, GSTIN No. of the consignor and
consignee shall also be mentioned. If the goods are exempted from the
purview of GST laws or either the consigner or the consignee is exempted
from taking registration then, VAT Registration No. and PAN No. shall be
mentioned. Further, in the column for the value of goods, GST invoice
No./ commercial invoice No./Challan No., as applicable, shall be provided.
Further, the consignor shall also submit a copy of GST invoice to the
proper officer. In case where goods are exempted from GST, copy of
commercial invoice shall be submitted.
(iii) The proper officer may, if satisfied with the declaration pass the Bill [in the
form specified in Appendix A to Transportation of Goods (Through Foreign
Territory) Regulations, 1965], and order such examination as may be
considered necessary.
(iv) The container containing such coastal goods shall be clearly marked with
the words “For Coastal Carriage through foreign territory” on the longer
sides of the containers. Further, the containers shall be sealed with tamper
proof one-time bottle seal or e-seal before being loaded on to the vessel.
(v) Non-containerised cargo shall also be allowed to be loaded on to the vessel
provided it is clearly marked on the goods or the packing thereof ‘For
Coastal Carriage through foreign territory’ to make it easily identifiable.
(vi) The Master of the vessel shall not permit the loading of such coastal cargo
unless the Bill [in the form specified in Appendix A to Transportation of
Goods (Through Foreign Territory) Regulations, 1965] duly passed along
with the permission of the proper officer to load the coastal goods is received
by him. On receipt of the documents, the master shall prepare the manifest
in triplicate.
(vii) The master of vessel shall also furnish e-Way Bill details (if applicable),
Container no. & Seal No. (for containerised cargo) in the Transit Manifest
(Appendix B).
(viii) The Transit manifest shall be prepared for the goods loading port and
discharge port combination wise. The proper officer may, after making
necessary checks, make an endorsement on the manifest, retaining one copy
of the manifest and return the other two copies to the master of the vessel.
The master shall retain one copy as carrier’s record and submit the other
copy to the proper officer at the destination port.
(ix) The Customs officer at the destination port may verify that only such of the
coastal goods (containers/ non-containerised) are unloaded as are intended
for that particular port and that the seals of the containers are intact, and
make a remark to this effect in the manifest.
(x) The master of the vessel may not be given permission for the departure of
the vessel unless it is established that the entire coastal cargo intended for
that port has been discharged.
(xi) For the containerised coastal cargo, in case the seals are not found to be
intact, the Customs officer may cause the container (s) to be opened and
permit the vessel to leave only if there is no discrepancy between the
contents of the container(s) and the information contained in the manifests
prepared at the port of loading. The proper officer may, however, permit the
vessel to leave if the Master or his Agent submits such surety or security as
he may consider necessary in respect of the containers for which the seals
are found to be tampered with.
(xii) In case of any tampering of seals or any discrepancy, the matter shall be
reported to the Deputy/Assistant Commissioner, who may adjudicate the
matter after issue of show cause notice. The procedures as applicable for
non-coastal cargo will apply mutatis mutandis to deal with such situation.
(xiii) Notwithstanding anything mentioned above, no goods, export of which is
prohibited under the Customs Act, 1962 or any other law in force, shall be
allowed to be transited through foreign territory under this procedure.
(xiv) The vessels carrying coastal goods may also carry EXIM/empty containers
subject to the observance of the procedure as applicable;
(xv) This procedure is applicable to only those vessels which are authorised to
carry coastal goods under Merchant Shipping Act, 1958.
(d) The movement of coastal cargo which is not transiting through foreign
territory would be governed by the procedure referred to in Circular No.
15/2002-Cus., dated 25-2-2002 and Circular No. 14/2016-Cus., dated 27-4-
2016.
2.2. Use of Imported Containers for carrying Domestic cargo:
2.2.1 Board has received the representations requesting to allow the use of imported
containers for carrying domestic cargo. It has been brought to the notice to the Board
that due to limited availability of return cargo on most of the coastal shipping routes,
the cost of repositioning of empty containers is high which increases the total logistic
cost of coastal shipping. Therefore, to reduce the logistic cost it has been requested
to allow the EXIM containers imported under notification No. 104/94 dated
16.03.1994 for carrying domestic goods.
2.2.2 The issue has been examined. Vide Letter F. No. 450/69/2000-Cus. IV, dated
30-10-2001, Board had permitted that the containers imported under the notification
No. 104/94-Cus., dated 16.03.1994 shall be allowed for the purpose of carrying
domestic cargo during the stipulated period of 6 months or the extended period as
may be allowed, pending re-export of the same. However, the facility was allowed
as a temporary measure.
2.2.3 As the Central government’s impetus is to promote the coastal shipping, Board
hereby permits the use of containers availing benefit of notification No. 104/94 dated
16.03.1994 for the purpose of carrying domestic cargo during the stipulated period
of 6 months or the extended period as may be allowed pending re-export of the same.
2.2.4 Further, as a consequence to the permission given in foregoing para, there
should not be such condition in the bond submitted for availing the benefit under
notification No. 104/94 dated 16.03.1994, which restricts the use of the containers
for carrying domestic cargo after importation.
2.3. Use of local or domesticated containers for transportation of EXIM
cargo:
2.3.1 Board has received representation from INSA pointing out absence of level
playing field between the tax treatment on EXIM containers owned by foreign
shipping lines etc. and domesticated containers. INSA have stated that Government
has allowed customs duty exemption vide notification No. 104/94-customs to
imported containers on the condition that the same would be re-exported within 6
months. However, local or domesticated containers if used for EXIM business are
not fully able to avail this exemption on re-import as these containers are not able to
meet the condition of re-export.
INSA has, therefore, requested to allow a similar exemption to locally manufactured
or domesticated containers (i.e. imported containers cleared for home consumption)
to be used for carrying EXIM cargo from India or bringing import cargo into India
at the time of their re-import into India. Further, they also asked for waiver from
provisions of section 46 & 50 of the Customs Act, which deals with filing of bill of
Entry & Shipping bill, as available to international containers.
2.3.2. The issue has been examined by the Board and in this regard, it is clarified
that:
(i) Locally manufactured or domesticated ISO containers [confirming to the
specifications from the International Organization for Standardization (ISO)] can be
used for transportation of EXIM cargo.
(ii) The difficulty expressed by INSA in availing the customs duty exemption on re-
import of domesticated containers is essentially procedural. The customs clearance
procedure for the import or export of the containers whether empty or laden would
remain same for imported containers or locally manufactured or domesticated ISO
containers. In other words, there would not be any requirement of filing Bill of Entry
(under section 46) or Shipping Bill (section 50) for locally manufactured or
domesticated ISO containers similar to international containers imported temporarily
(circular No. 31/2005-Cus., dated 25-7-2005 refers).
(iii) However, the shipping lines should intimate to the Customs the number and
identification particulars of the locally manufactured/domesticated containers to be
moved outside the country or to be re-entered into the country;
(iv) The entry of the container no. in the shipping bill for which ‘allowed for
shipment’ has been granted, may be considered as permission of export for the
containers for purposes of section 51. In case of export of empty containers, entry
thereof in Export General Manifest would be treated as permission of export for the
containers under section 51. In view of this relaxation, there should not be any
difficulty in availing the duty exemption upon re-importation of these containers
under notification No. 45/2017-Customs dated 30.06.2017.
3. These instructions may be brought to the notice of all concerned by way of issuance of
suitable Public Notice/Standing Orders.
4. Difficulties, if any in implementation of these instructions, may be brought to the notice
of the Board.
Yours faithfully,
(Piyush Bhardwaj)
STO (TU)
