Custom collection to exceed Budget Estimates: FM

New Delhi, June 23 (UNI) Finance Minister P Chidambaram today averred that the government does not propose to use custom duties as a revenue raising measure and said in an ideal situation these duties should be reduced to nil, which was the ultimate goal of the Finance Ministry.

Yet, he said, the Budget Estimates of customs are likely to be met or even excceded in 2006-07, thanks to buoyancy in the GDP growth, especially brisk growth of the manufacturing sector.

The Finance Minister made these remarks while launching the 'Risk Management System' at the New Customs House, near IGI Airport.

'The Risk Management System,' already in place in some other Airports including Mumbai, is to replace the present system at Delhi Airport of examination of the import documents and goods by the computer system based on certain risk management parameters. "I am confident the economy will grow at a high rate. The manufacturing sector will also grow at a brisk pace," Mr Chidambaram said.

He, however said this condition was possible in the absence of any external shock.

The Finance Minister said last year customs duty exceeded the Budget Estimates and Revenue Estimates, which was largely a result of the economy growing at 8.4 per cent.

The Finance Minister noted that the boyancy in the customs revenues was being maintained despite a gradual reduction of customs duties.

He said in an ideal world customs duties should be brought down to zero and this was the manner in which the global community was moving.

Mr Chidambaram said the government was reducing customs duties in a phased manner and cited figures in this connection. In 2004-05 the peak rate of customs duty was 25 per cent and in the last budget this was reduced to 12 per cent.

He asked the Customs Department to prepare for a situation where customs duty would be falling and the only reason for using this measure would relate to public safety, health and security.

Mr Chidambaram said more and more exporters should resort to the facilitiation route, which requires permitting goods from the customs house without examination. This would, however, require that they develop a good track record for two years or so, which alone will enable them to have a shared vision with the Department. More and more companies have been adopting this procedure by following the Customs Accredited Programme.

Under this programme, regular importers with a reputation of prompt compliance are accredited. This accredition secures them assured facilitiation at major Customs ports throughout India. This involves self-assessment and no examination by customs, enabling quick deliveries.

Mr Chidambaram asked exporters to be prepared for prompt duty payment so that their inventories are reduced and efficient and time saving delivery of manufactured goods are made.

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