Special economic zones (SEZs) are facing a massive crunch of customs personnel, which, if not addressed to, could possibly lead to a cap on the number of these tax free enclaves.
According to the finance ministry, once most of the over 500 SEZs?which have so far got approval from the Board of Approval for SEZs in the commerce ministry?becomes functional, there will be a shortage of about 2,500 customs officials.
While a large multi-product SEZs (of over 1,000 hectares) would require at least 17 customs personnel, smaller sector specific ones (with a minimum area of 100 hectares) would need about five to six officials.
Currently around 146 SEZs have been notified. Commerce ministry has also informed the finance ministry of the urgency in posting of customs officials in these notified SEZs saying the officers are crucial for operationalisation of the new SEZs.
A finance ministry official said, ?We cannot have SEZs operating without the required customs support. At present, we are merely posting officials from lesser important places to SEZs, wherever we are facing a shortage, he added. However, we will need to address this issue seriously very soon.?
?A cap on the number of approvals is an issue we will address, if the eventuality comes up,? an official said.
Alternatively, the government may decide to overhaul its customs administration. In such a situation, more customs personnel may be recruited. Recently the finance and the commerce ministries had reached an agreement on posting 650 customs officers in the upcoming SEZs.
The government may also decide to divert personnel from lesser important places and posts in the hinterland where they are not required very urgently to such zones. However, ports and border areas, where there is a lot of export-import trade, are unlikely to be disturbed.
SEZs are permitted to get the required inputs through imports and also from the domestic market without payment of duty. ?Customs officials, manning the gates of the SEZ, have to clear all the formalities. They have to ensure that every duty free input is put in the bonded area and that it remains there,? an official said, adding that ?initially they have to clear the inputs which the developers bring into the SEZ. Later on they have to also check the inputs brought in by the units.?