CBEC discontinues MOT fee at 24x7 customs ports and airports

The Dollar Business Bureau

Central Board of Excise and Customs has amended the customs fee norms, by doing away with the merchant overtime fee (MOT) collected in exchange of the services provided by the customs officials at 24x7 customs ports and airports.

“Thus, as on date no MOT charges are required to be collected in respect of the services provided by the customs officers at 24x7 customs ports and airports,” CBEC said in an announcement.

In 2012 the CBEC had on a pilot basis introduced 24x7 customs clearance at 4 designated Air cargo complexes and 4 sea ports, subsequently it was extended to 13 air cargo complexes that included all shipping bills free or those that were filed at the said air cargo complexes. Now the same has been extended to 19 sea ports and 17 air cargo complexes.

CBEC had allowed the facility of 24x7 customs clearance for goods covered by facilitated Bills of Entry and specified exports i.e. factory stuffed containers and goods shipped under free shipping bills on permanent basis at the designated 19 sea ports including Krishnapatnam. But the Customs department made it mandatory that logistics support like machinery/cranes for movement of containers and the labour used for the same has to be fulfilled by the custodian of the goods or importer or customs broker. With these amendments in place, the customs has decided to extend 24x7 customs clearance to all bills of entry and not just facilitated bills of entry.

The Board has received references, seeking clarification on whether MOT charges should be collected in lieu of stuffing of export goods at Container Freight Stations (CFSs). With regard to the above query, the CBEC has issued clarification that:

1. CFSs serve as an extension of the port and facilitate a faster clearance of EXIM goods. Therefore, a bulk of regulatory affairs has shifted to CFSs.
2. Factory stuffed containers are already covered under 24x7 operations, therefore, MOT charges are not required to be paid in lieu of services (like verification of seals etc) rendered by customs officers at CFSs in respect of such containers.
3. Other than at the manufacturing premises, stuffing can inter-alia also occur at CFSs for export against free shipping bills or otherwise. In the case of sea ports, free shipping bills are already covered under 24x7 scheme while the goods exported against a claim to benefit are not. Considering that the customs work carried out in the CFSs is actually an extension of the clearance activity at the port, therefore, logically no MOT charges should be leviable in lieu of services rendered by customs officers within the CFS premises even in the case of export against a claim to benefit.
4. No MOT charges will be collected at CFSs attached to the 24X7 ports in lieu of the services rendered within the CFS. This decision is an attempt to bring the MOT collection framework on a level with the situation on the air side that covers all shipping bills free.