INDIAN Customs Electronic Data Interchange System (ICES) suffers from several deficiencies even after 18 years of roll-out, installation of upgrades and several recommendations by auditors for removal of flaws.

In its latest report of ICES presented to Parliament on 18th July, Comptroller and Auditor General of India (CAG) found that data validations in several critical areas were lacking at the application level, despite deficiencies having been pointed out by CAG in the last performance audit.

The critical areas include customs and excise exemption notifications, country of origin based-exemption and RSP-based assessments, which are essential for ensuring correct assessments, were found to be lacking.

These deficiencies resulted in incorrect exemptions which were accepted by the application, leaving scope for mis-declarations and incorrect assessments and consequent leakage of revenue, the Report says.

“The Directory updating procedure for the master tables of notifications, duties, exchange rates, etc. was also found lacking in appropriate checks, leading to delayed updating and failure to defect missed updating,” it adds.

According to CAG, the Customs Department does not have any roadmap for future development of ICES. It has not built sufficient internal competencies over the years for better management and monitoring of the ICT systems and applications by recruiting technically qualified manpower, which may affect operational efficiency. There is no provision for internal audit of the core applications to review their effectiveness.”

CAG has thus advised the Department to consider getting its core applications audited periodically for detecting deficiencies and suggesting improvements in the applications. The Government, however, must maintain strategic control over ICES and accordingly urgently review the service level agreement (SLA) with the information technology service provider.

CAG has also advised the Department to consider introducing appropriate validations in the ICES applications and risk management system (RMS) to detect the related cases. The facilitation accorded to accredited client program (ACP) clients by RMS may also be examined, in view of the large volume of goods cleared at RSPs declared below import cost.

It has also suggested that any changes in the operational features of logical security elements like password policy may invariably be implemented only after due authorization and documentation of the changes.