CBIC has taken various steps which have had the impact of reducing the dwell time as well as bringing down the logistics cost of EXIM clearances. One of the flagship initiatives in this regard has been the Direct Port Delivery (DPD). DPD is an innovative scheme, introduced at JNCH and replicated at other CFS-based ports in India by CBIC in September 2019. This initiative has transformed the process of cargo clearance, by allowing the facilitated consignments to be given ‘out of charge’ directly from the terminal premises, thereby eliminating the requirement of containers being moved to CFSs for completing Customs formalities before grant of ‘out of charge’. DPD has been a major factor in improving ease of doing business, trade facilitation and reduction in cargo release time, since it reduces unnecessary transport to and handling of containers at the CFS, thereby resulting in substantial savings in cost of clearance as well. With effect from 07th July, 2021 all the advance Bills of Entry which are fully facilitated (do not require assessment &/or examination) would be granted the facility of DPD. This facility is over and above the erstwhile system of entity based DPD extended to Authorised Economic Operator (AEO) clients. This is expected to broaden the eligibility leading to further reduction in dwell time.
Outline
The Government of India (GOI) introduced a Direct Port Delivery system for importers to take delivery directly from the port, rather than the CFS process. The DPD system was first introduced in Jawaharlal Nehru Port (JNPT) for all the registered members associated with the Customs Accredited Client Program (ACP).
It was implemented to minimize the delivery time, regularize the process of storing containers at ports and reduce the logistics cost of the containers. This helps to create more space for consignments if the manufacturer requires necessary or additional storage space.
The DPD system operates in two types of modes, they are:
DPDDPD – The importer takes delivery from the port with their transport
DPD/CFS – The importer chooses the CFS process for delivery
This announcement seeks to extend its operation to all the ports in India by streamlining general guidelines, eligibility criteria, and mode of operation. Since this process offers prolonged minimal cost for operation, CBIC recommends all the importers register with
Challenges/ Resistances faced
(a) Apprehension of losing business by CFSs and labourers were resolved by sensitization about increase in business due to more traffic at Port on account of reduced Turn Around Time (TAT).
(b) Some part of their CFS were converted into warehouse and DPD area to hold the goods after Customs Clearance which proved profitable for CFSs.
(c) Writ Petitions were filed by CFS association and Shipping Lines in Bombay High Court but the Hon’ble Court upheld the Department’s stand taken in public interest.
(d) Initially, importers had to be pursued through outreach programmes to convince them about the benefits of the scheme.
Objectives of DPD
- To decrease the time for allocating and re-allocating the shipping consignments.
- Play a vital role in having a minimal rate for the operations
- Simplify the rules, regulations, and eligibility criteria for ease of doing business
- Encourage SMEs, MSMEs, and shipping industries to actively participate in the DPD system
- Increase the infrastructure of the ports to store more consignments
- Support Accredited Client Program to increase voluntary compliance among the importers
Eligibility Criteria for Direct Port Delivery Scheme by Importers
Avoiding Clearance through Container Freight Stations (CFS)
One of the important initiatives by CBIC is taking necessary measures to avoid routing the clearance through CFS. This initiative has reduced time and proved cost-effective for all the importers. It was first launched at JNPT and will soon be implemented in other ports.
Since CBIC adopted the DPD process, the consignments would be transferred by the internal team rather than members from the shipping company. This allows the containers to be sealed appropriately, labeled for identification, and sorted and stored for allocation when the quantity is less than complete.
Regulating guidelines
CBIC has regulated the guidelines to increase the mode of operation at all ports in India. The regulated guidelines will methodize the eligibility criteria, which will, in turn, increase registered importers and simplify the process of business.
Factors for availing DPD Scheme
Other than the benefits of time management and cost-effective process, importers choose to avail of DPD for the following reasons:
- Non-receipt of original documents from foreign countries
- Consistent delay in delivering the order
- Financial and credit constraints
- Delay in settlement of debt of shipping lines
- Choosing a PD account with the terminals
Guidelines for DPD
Eligible criteria for availing of DPD
- The importers should have registered as AEO Tier I, II, or III status
- The importers should have a clear track record
- The import volume should be 25 Full Container Load (FCL), and Twenty-Foot Equivalent Units (TEUs) in the present or previous financial year.
- All information should be furnished under Annexure-A
Importers who are not Eligible to Avail of DPD
Importers who have a track record or case of the following in the last five years:
- Mis-declaration of account of goods
- Harboring
- Diverting the imported goods without informing the official department
Importers recorded with ongoing prosecution proceedings under Section Customs Act, 1962
Imported goods are subjected to 100% examination related to the current terms and policies
Rules for availing of DPD
- The importers should open a PD account with the terminals
- The shipping company should arrange the transport for transporting the goods from the port to the industrial or manufacturing site
- Should follow all the norms as stipulated by CBIC
Documents Required to Apply for DPD if the Importer is not registered with DPD Cell.
- Original Bill of Landing (B/L)
- Copy of the Delivery Order
- Original FTA certificates
- Copy of Terminal discharge report
Applying for DPD
Step 1: The importer should inform the Shipping line 48 hours in advance before the arrival of the vessel
Step 2: The mode of DPD, such as DPDDPD or DPD/CFS, should be informed while registering with the Shipping line.
Step 3: File advance B/E and procure OOC from the DPD cell to exit the port gate
Step 4: The importer can inform in advance through mail or by DPD portal for importers
Step 5: After providing the required information, the importer can download the IAL document from the DPD Portal
Step 6: Verify the status of DPDDPD or DPD/CFS
FAQs
What is the Direct Port Delivery (DPD) Scheme?
The Direct Port Delivery (DPD) Scheme is an initiative by the Indian government that allows importers to receive their cargo directly from the port terminal, bypassing the need to route it through a Container Freight Station (CFS). This scheme reduces the time and cost associated with customs clearance and transportation.
What are the benefits of the DPD Scheme for importers?
- Faster cargo clearance and reduced dwell time at ports.
- Lower logistics costs due to the elimination of CFS handling charges.
- Streamlined supply chain processes, leading to quicker delivery of goods to the importer.