Custom Department in any country plays an important role in controlling the illegal imports and exports of goods. Every country has a separate custom rules and regulation in which export or import of certain goods may be restricted or forbidden.
Custom Department vs. Immigration Department
The customs department is quite different from immigration department and one should not confuse between these two. Immigration department monitors persons who leave or enter the country, checking for appropriate documentation, apprehending people wanted by international search warrants, and impeding the entry of others deemed dangerous to the country where as custom department only deals with the export or import of goods.
Custom duties are the taxes imposed by a government on the export and import of items. Custom duties are different for different items.
- Restricting Imports for conserving foreign exchange
- Protecting Indian Industry from undue competition
- Prohibiting imports and exports of goods for achieving the policy objectives of the Government.
- Regulating exports
- Co-coordinating legal provisions with other laws dealing with foreign exchange such as Foreign Trade Act,Foreign Exchange Regulation Act, Conservation of Foreign Exchange and Prevention of Smuggling Act, etc.
Red and Green Channels
In most of the international airports, there are two separate custom procedures for the passengers. These two custom procedures are known as
Red Channel and Green Channel.
Red Channel: Passengers with goods to declare (carrying items above the permitted customs limits and /or carrying prohibited items) should go through the Red Channel.
Green Channel: Passengers with nothing to declare (carrying goods within the customs limits only and not carrying prohibited items) can go through the Green Channel. Passengers going through the Green Channel are only subject to spot checks and save time.
Any passenger going through the Green Channel is found to have goods above the customs limits or carrying any kind of prohibited items, may be prosecuted for making a false declaration to customs, by virtue of having gone through the Green Channel.
Blue Channel: Instead of Red or Green Channels, European Union has a separate Blue Channel System. The countries falling under EU have a common Customs and passengers travelling between nations of EU do not have to pay customs duties. VAT and Excise duties may be applicable but only if the goods are subsequently sold. Also these taxes are only collected when the goods are sold in the market. No taxation is done at the airport.
Privatization of Customs
In almost every country, Customs are the part of the organization performing three basic functions of a government, namely, administration, maintenance of custom law and order and collection of taxes. However, in a bid to get Customs rid of corruption, many countries have partly privatized its Customs departments. This has occurred by way of engagement of Pre-shipment Inspection Agency who examines the cargo and verifies the declared value before importation is effected. In such situation, custom department is obliged to accept the report of the agency for the purpose of assessment of leviable duties and taxes at the port of entry.
Involvement of such agencies could be a good factor for the countries with a novice or inadequate Customs but yet this measure has not really been able to plug the loophole and protect revenue. Privatization of Customs has been viewed as a fatal remedy as it has been alleged that such involvement of such agencies has been causing delay in the shipment process.