Currently, Central Board of Indirect Taxes and Customs (CBIC) manually notifies exchange rates of 22 currencies every fortnight — 1st and 3rd Thursday of a month — based of rates obtained from the State Bank of India (SBI). The rate notified comes into effect from midnight of the following day.
An official said the entire process would be automated, beginning with forwarding of exchange rate data by SBI to ICEGATE.
The exchange rates received from SBI every day shall be adjusted to the nearest five paise and integrated with Indian Customs EDI System (ICES) and published on Indian Customs National Trade Portal (ICEGATE) by 6:00 pm.
“In order to capture exchange rate fluctuations more closely, the CBIC has decided to publish exchange rates of 22 currencies on ICEGATE website on a daily basis. Stakeholder consultations are on and the system would be introduced soon,” the official told PTI.
As per the plan, on holidays when SBI doesn’t publish the rates, the prevailing rates shall apply the next day.
At present, after fortnightly notification, if the exchange rate of a currency fluctuates more than ±5 per cent, the rate for that currency is re-notified from the following day. The benefits of the proposed system for determining and publishing exchange rates on a daily basis, experts said, will enable importers and exporters to make more informed decisions about their transactions. The exchange rates will be more accurate and reflect the current market conditions and would be time efficient.
The new system includes a contingency plan in case of any technical snags or failures in electronic transmission, ensuring uninterrupted accessibility of exchange rates at any given time.
AMRG & Associates Senior Partner Rajat Mohan said it would help check incorrect calculation of customs duties arising from fluctuating exchange rates.
“Daily floating exchange rates will be marginal for small consignments, but tax differentials could be colossal for large consignments.
This change points to the fact that the Indian economy is becoming digital in every sense when compared to other developed nations,” Mohan added.