"In the light of... international developments, as well as in view of the focus of the Government of India on "Ease of Doing Business", it has become imperative to develop a comprehensive unified trade facilitation programme by incorporating the existing ACP scheme and ongoing AEO programme into a revised AEO programme providing additional facilities to the legitimate trade who have demonstrated strong internal control system and willingness to comply with the laws administered by the Central Board of Excise and Customs," stated the draft circular of the AEO programme.
CBEC has sought stakeholder's comments on the scheme by June 30.
The move is expected to ensure trade facilitation and support domestic production.
"It has been decided that the existing ACP and AEO programmes will be merged into this new AEO programme," stated the AEO draft circular.
AEO holders will be allowed to move their cargo, as it arrives at the land or sea port to the warehouse without any checks.
An AEO programme offers members reduced examination and inspection, and acceptance of pre-arrival import declarations.
The government did away with the eligibility criterion of Rs 10 crore worth imports in the previous fiscal to encourage medium and small enterprises be a part of this scheme as against just large members.
"Special focus (is) on small and medium enterprises. Any entity handling 25 import or export documents annually can become a part of this programme," stated the circular.
The current ACP managed to have just 300 odd members and about 13 per cent of imports happen through the route. The programme was launched in 2005.
However under the revamped scheme, The government is aiming that at least 40 per cemt of imports occur through the revamped programme, with more than 1,000 members.
The US has 11,000 members as part of the AEO programme.
For the economic operators other than importers and the exporters, the new programme offers only one tier of certification whereas for the importers and the exporters, there will be three tiers of certification.
Tier-I AEO certificate will offer expedited Investigation and fastracked dispute resolution for service tax, excise amd customs besides other benefits. However only Tier-II certificates onwards will deferred payments of customs duty be allowed. To be eligible for Tier-III certificate, one will need to be a Tier-II certificate holder for at least two years. AEO seeks to provide tangible benefits in the form of faster customs clearances and simplified customs procedures to those business entities who offer a high degree of security guarantees in respect of their role in the supply chain.
The objective of the revised AEO is to provide businesses with an internationally recognised quality mark which will indicate their secure role in the international supply chain and that their customs procedures are efficient and compliant. "An entity with an AEO status can, therefore, be considered a 'secure' trader and a reliable trading partner," said the circular.