Benefits of an AEO Certificate - CBEC's Customs Manual 2023 - Customs

4. Benefits of an AEO Certificate: A business authorized by the Customs as an AEO can enjoy benefits flowing from being a more compliant and secure company as well as favourable consideration in any Customs proceedings coupled with better relations with Customs. AEO status will also ensure a low-risk score is incorporated into Customs, Risk Management System (RMS) and used to determine the frequency of Customs physical and documentary checks. The benefits may also include simplified Customs procedure, declarations, etc. besides faster Customs clearance of consignments of/for AEO status holders. The scope of the benefits to the AEOs based on their categories would be as mentioned below: 4.1 Benefits for AEO-T1: i. They shall be accorded high level of facilitation in imports and export of their consignments, thereby ensuring shorter cargo release time. ii. Facility of Direct Port Delivery (DPD) of their import Containers and/ or Direct Port Entry (DPE) of their Export Containers would be available to them (depending on the volume of their Import/ Export trade in terms of number of containers). iii. ID cards to be granted to authorized personnel for hassle free entry to Custom Houses, CFSs and ICDs. iv. Wherever feasible, they will get separate space earmarked in Custodian s premises. v. In case they are required to furnish a Bank Guarantee, the quantum of the Bank Guarantee would be 50% of that required to be furnished by an importer/ exporter who is not an AEO Certificate Holder. However, this exemption from Bank guarantee would not be applicable in cases where the Competent Authority orders furnishing of Bank Guarantee for provisional release of seized goods. vi. Investigations, if any, in respect of GST, Customs, erstwhile Central Excise and Service Tax cases would be completed, as far as possible, in six to nine months. vii. Dispute resolution at the level of Adjudicating Authorities in respect of GST, Customs, erstwhile Central Excise and Service Tax cases would be done preferably and as far as possible within six months. viii. They will not be subjected to regular transactional PCA, instead of that onsite PCA will be conducted once in three years only. ix. They will get an e-mail regarding arrival/ departure of the vessel carrying their consignments. x. 24/7 clearances on request at all sea ports and airports No Merchant Overtime Fee (MOT) charges need to be paid. xi. Where there is no SION/valid Ad-hoc Norms for an export product and where SION has been notified but exporter intends to use additional inputs in the manufacturing process, eligible exporter, who is an AEO, can apply for an Advance Authorization under this scheme on self-declaration and self-ratification basis (added by Circular No. 3/2018- -Cus., dated 17.01.2018). xii. Will be exempted from the requirements of drawal of samples for the purpose of grant of drawback, except in case of any specific information or intelligence(added by Circular No. 18/2017-Customs dated 29.05.2017). 4.2 Benefits for AEO-T2: The following benefits would be provided over and above the benefits offered in T1: i. They shall be accorded higher level of facilitation (as compared to AEO-T1 in imports and export of their consignments. ii. For Importers/Exporters not opting for DPD/DPE, seal verification/scrutiny of documents by Custom officers would be waived. Consignments would be given out of charge or let export order, as the case may be, without any scrutiny by the officers. iii. The containers selected for scanning will be scanned on priority, by giving front line of treatment. iv. Facility of deferred payment of duty will be provided, from a date to be notified v. Faster disbursal of drawback amount within 72 hours of EGM submission, from a date to be notified vi. The BEs/SBs selected for Assessment and/or Examination will be processed on priority by the Customs officers. vii. Facility of self-sealing of export goods would be allowed without the requirement to seek case to case base permission from the authorities viii. Faster completion of Special Branch ( SVB ) proceedings in case of related party imports and monitoring of such cases for time bound disposal in terms of new guidelines ix. In case they are required to furnish a Bank Guarantee, the quantum of the Bank Guarantee would be 25% of that required to be furnished by an importer/ exporter who is not an AEO Certificate Holder. However, this exemption from Bank guarantee would not be applicable in cases where the Competent Authority orders furnishing of Bank Guarantee for provisional release of seized goods. x. They will be given facility to paste MRP stickers in their premises. xi. They will not be subjected to regular transactional PCA instead of that onsite PCA will be conducted once in three years only. xii. They will be given access to their consolidated import/export data through ICEGATE from a date that would be communicated separately. xiii. They will be provided the facility of submitting paperless declarations with no supporting documents in physical form. xiv. All Custom Houses will appoint a Client Relationship Manger (CRM) at the level of Deputy / Assistant Commissioner as a single point of interaction with them. The CRM would act as voice of the AEO within Customs in relation to legitimate concerns and issues of AEO and would assist in getting procedural and operational issues resolved by coordinating with different sections within Customs as well as other stakeholders. xv. The refund/Rebate of Customs/Central Excise duty and Service Tax would be granted within 45 days of the submission of complete documents. xvi. They will get trade facilitation by a foreign Customs administration with whom India enters into a Mutual Recognition Agreement/Arrangement. 4.3 Additional Benefit for AEO T1 AEO T2 (for MSME): i. The benefit of relaxation in furnishing of Bank Guarantee for AEOs has been further relaxed to 25% from 50% and 10% from 25% of that required to be furnished by an importer/exporter who is not an AEO certificate holder, for MSME AEO T1 and MSME AEO T2 entities respectively. 4.4 Benefits for AEO-T3: The following benefits would be provided over and above the benefits offered in T2: i. They shall be accorded highest level of facilitation, as compared to AEO-T2, in imports and export of their consignments. ii. Their containers will not be selected for scanning except on the basis of specific intelligence. Further when any container is selected for scanning, top most priority will be given for scanning. iii. The assessing/examining custom officer will rely on the self-certified copies of documents submitted by them without insisting upon original documents. iv. They would not be required to furnish any Bank Guarantee. However, this exemption from Bank guarantee would not be applicable in cases where the Competent Authority orders furnishing of Bank Guarantee for provisional release of seized goods. iv. An approach based on Risk based interventions, in case of requirements originating from the Acts administered by other Government Agencies/Departments, will be adopted for providing better facilitation in imports and export of their consignments. v. On request, they will be provided on-site inspection /examination. vi. The refund/Rebate of Customs/Central Excise duty and Service Tax would be granted within 30 days of the submission of complete documents. The comparable benefits available to AEO-T1, AEO-T2 (including MSMEs) and AEO-T3 are summarized in Table 34.1 below: Table 34.1: Comparable benefits available to AEO-T1, AEO-T2 (including MSMEs) and AEO-T3 S. No. Facility to be provided Benefits for AEO-T1 Benefits for AEO-T2 Benefits for AEO-T3 1 Accorded facilitation in import and export Consignments ensuring shorter cargo release time High Higher Highest 2 Facility of DPD/ DPE Available depending on volume Available Available 3 ID cards for hassle free entry to Custom Houses, CFSs and ICDs Yes Yes Yes 4 Separate space earmarked in Custodians premises Yes Yes Yes 5 BG required to be furnished 50% (25% for MSME) 25% (10% for MSME) NIL 6 Investigations to be completed In 6-9 months In 6-9 months In months 6-9 7 Dispute resolution at AA level Within 6 months Within 6 months Within months 6 9 Email intimating vessel arrival for their consignment Yes Yes Yes 10 24X7 clearance at all sea ports and airports. Yes Yes Yes 11 No merchant overtime fees need to be paid Yes Yes Yes 12 Exemption from the requirements of drawal of samples for the purpose of grant of drawback Yes Yes Yes 13 Waiver of seal verification / scrutiny of documents -- For Non DPD / DPE option availed Yes 14 OOC/ LEO without scrutiny by customs officer -- Yes Yes 15 Scanning on priority -- Yes Container will not be scanned except on specific intelligence 16 Facility of deferred payment of duty -- Yes Yes 17 Faster disbursal of drawback -- Within 72 hours of EGM Within 72 hours of EGM 18 Priority given to B/E or S/B selected for assessment/ examination -- Yes Yes 19 Facility of self sealing of consignments for export -- Permitted on case to a case basis Permitted 20 Faster completion of SVB Proceedings -- Time bound manner Time bound manner 21 Facility to paste MRP stickers in premises -- Allowed Allowed 22 Access to consolidated import export data on ICEGATE -- Available Available 23 Facility of paperless declaration -- Available Available 24 Custom House Assistance -- Through Client Relationship Manager (CRM) Through Client Relationship Manager (CRM) 25 Trade facilitation by foreign customs administration (MRA) -- Yes Yes 26 Assessing / examining officer will rely on self certified documents -- -- Yes 27 Only Risk based intervention in case of other govt. agencies / departments -- -- Yes 28 Onsite inspection / examination -- -- On request available 4.5 Benefits for AEO-LO: The benefits available to different entities eligible to be qualified as AEO-LO are summarized in Table 34.2 below: Table 34.2: Benefits available to different entities eligible to be qualified as AEO-LO Sr. No. Entity Facilities to be provided 1 Logistic Service Providers Waiver of bank Guarantee in case of trans-shipment of goods under Goods imported (Condition of Trans-shipment) Regulations, 1995. Facility of Execution of running bond. Exemption from permission on case to case basis in case of transit of goods. In case of international transshipped cargo (Foreign to Foreign), for the pre-sorted containers wherein Cargo does not require segregation, ramp to ramp or tail to tail transfer of cargo can be effected without Customs escorts. 2 Custodians or Terminal Operators (a) Waiver of bank Guarantee under Handling of cargo in Customs Area Regulations 2009. (b)Extension of approval for custodians under regulation 10(2) of the 'Handling of cargo in Customs Area Regulation 2009 'for period of 10 years. 3 Customs Brokers Waiver of Bank Guarantee to be furnished under regulation 8 of the CBLR, 2013. Extended validity (till validity of AEO status) of licenses granted under regulation 9 of the CBLR 2018. System Manager to incorporate date of validity of AEO from time to time in the System Directory Waiver from fee for renewal of license under sub regulation (2) of regulation 11 of CBLR,2013. 4 Warehouse Operators Faster approval for new warehouses within 7 days of submission of complete documents Waiver of antecedent verification envisaged for grant of license for warehouse under circular 26/2016 Waiver of solvency certificate requirement under circular 24/2016 Waiver of security for obtaining extension in warehousing period under circular 21/2016 (e) Waiver of security required for warehousing of sensitive goods under circular 21/2016 4.6 With a view to promote an overall voluntary compliance framework, the selection of AEO S for on-site post clearance audit (OSPCA) in respect of AEO-T1, AEO-T2 and AEO-T3 shall be based on risk assessment. Better and higher compliance level demonstrated by the AEO shall be taken into account for determining the frequency of audit. It is also clarified that AEOs undergoing OSPCA shall not be subjected to routine transactional PCA. Detailed guidelines on risk based OSPCA will be issued subsequently.