Customs "commercialising" its airport operations

Taking a cue from other statutory bodies like the Airports Authority of India (AAI), and Central Industrial Security Force (CISF), the Indian Customs authorities have demanded payment for their services rendered at the private operated airports like Bengaluru International Airport (BIA) and Rajiv Gandhi International Airport (RGIA).

Up till now, while AAI and CISF used to be paid for services like air traffic control and security services, even at AAI operated airports, Customs and Immigration were seen as a sovereign function, and no airport operator had to pay for it. But then, all airports in the country had been developed and/or operated by the state-owned AAI.

As per a news story by DNA of Sify, "The Central Board of Excise and Customs (CBEC) is seeking payment of salaries for its staff to be deployed at the new airport as well as expenses on fittings and fixtures, housing and transport for these people. As per existing policy, no airport operator is permitted to conduct certain operations (including security of the airport, customs and immigration) on its own so it has no choice but to approach the designated central agency for the purpose."

This demand poses an additional cost for both GMR and BIAL, the promoters of RGIA and BIA respective, and puts the Ministry of Civil Aviation in an embarrassing position. While the ministry has lodged a strong protest with the Finance Ministry, the operators at RGIA, are paying the demand "under protest". When BIA opens up, BIAL will also have no choice but to accept and pay.

I am in favour of this approach. For too long, we in India, have been used to getting services from the Government "gratis". We need to move to a lower tax regime, with a "payment for services", even for Governmental services. Customs have the right to demand their costs be re-imbursed, however, then, the airport operator should also be given the ability, to demand responsibility on the Customs authorities to follow rules of commerce and deliver the required services for payment received.

The rupee should cut both ways.

Part of this story was sourced from Sify.com and DNA Money