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Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxation & Customs
Directorate of International Customs
Circular No. 54/2020-Customs
New Delhi, dated the 15th December, 2020
All Pr. Chief/Chief Commissioners of Customs/Prev./Central Tax,
All Pr. Commissioners/Commissioners of Customs/PrevfCentral Tax,
All Pr. Directors General/Directors General under CBIC,
All Pr. ADG/ADG under CBIC
Madam/Sir,
Subject: Special measures to facilitate MSME for AEO T1 & T2 accreditation- reg.
Please refer to the CBEC Circular No. 33/2016 dated 22.07.2016 as amended, hereinafter referred to as the “Master Circular” regarding the Authorised Economic Operator (AEO) programme. Para 3.1.9 of the Master Circular states that “In particular, the AEO Programme Manager shall take into account the possible difficulties for MSMEs in meeting with these eligibility conditions and criteria under paras 3.3 and 3.5 with a view to make the above AEO certificates more available to MSMEs.”
2. In line with the Prime Minister’s Aatma Nirbhar Bharat Abhiyaan to support MSMEs against the challenges of the COVID-19 pandemic, CBIC has examined the difficulties faced by MSMEs while applying for AEO accreditation. Accordingly, the Board has decided to relax the entire gamut of compliance and security requirements for MSMEs. The relaxation has been carried out to ensure that the MSMEs are facilitated through rationalized compliance requirements (MSME Annexure I & 2) and minimum but effective security requirements (MSME Annexure 3).
3. Accordingly, the Board has decided to facilitate MSMEs by further relaxing the current accreditation process and reducing the compliance burden for their AEO accreditation. The procedural modifications/relaxations for AEO accreditation of MSMEs are as under:
i. The eligibility requirement of handling a minimum of 25 documents during the last financial year has been relaxed to 10 documents, subject to handling at least 5 documents in each half-year period of the preceding financial year (Ref.: Para 3.1.7 of the Master Circular).
ii. The requirement for the applicant to have “business activities for at least three financial years preceding the date of application” has been relaxed to two financial years. (Ref.: Para 3.1.6 of the Master Circular).
iii. The qualifying period for legal and financial compliance has been reduced from ‘the last three financial years’ to ‘the last two financial years’. (Ref.: Paras 3.2 & 3.4 of the Master Circular).
iv. For AEO TI and T2 accreditation, the present annexures i.e., Annexure A, B, C, D, E.1-E.4 have been supplanted with two annexures viz. MSME Annexure 1 and 2. Similar rationalized annexures I and 2 are presently being utilized for AEO TI accreditation only in accordance with the CBIC Circular No. 26/2018-Customs dated 10.08.2018.
v. For AEO T2 certification, the present annexures i.e., Annexure E.5. I -E.5.7 for physical verification have been rationalized to a single annexure viz. MSME Annexure 3. The rationalization has been carried out to ensure that the security requirements for an MSME are objective and cover the minimum verifiable security criteria. (Ref.: Para 3.5 of the Master Circular).
vi. The time limit for processing of MSME AEO T1 & AEO T2 application has been reduced to fifteen working days (presently one month) and three months (presently six months) respectively after the submission of complete documents for priority processing by customs zones.
vii. 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 (Ref.: Para 3.5 of the Master Circular).
4. The aforestated relaxations shall apply only to an applicant who has a valid MSME certificate from the line-Ministry. Further, the approved MSME must ensure their continuous MSME status during the validity of its AEO certification, if granted.
5. Thus, the AEO accreditation for MSMEs now requires submission of only two annexures for AEO TI and three annexures for AEO T2 applicants respectively. The two common annexures for AEO T1 and AEO T2 are: MSME Annexure 1 (General Compliance), MSME Annexure 2 (Legal, Managing Commercial Records, and Financial Solvency Compliance). Further, the third annexure for AEO T2 is MSME Annexure 3 (Safety and Security Requirements). These annexures have been designed to fulfil the aspirations of simpler application procedure with reduced documentation requirement for AEO accreditation of MSMEs.
6. The Board Circular No. 33/2016- Customs dated 22/7/2016 as amended stands modified to the above extent.
7. Wide publicity may please be given to this Circular by way of issuance of Trade/Public Notice.
8. Difficulties faced, if any, in the implementation of this Circular may be brought to the notice of this office.
Yours faithfully,
F.No. D-20/DICNCTF(NTFAP)/29/2017
(Man ish Kumar)
Joint Commissioner (DIC)
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