CBIC issued Policy and Guidelines for setting up of Inland Container Depots (ICDs), Container Freight Stations (CFSs) and Air Freight Stations (AFSs)

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CBIC vide Circular No. 50/2020-Customs dated November 05, 2020 issued Policy and Guidelines for setting up of Inland Container Depots (ICDs), Container Freight Stations (CFSs) and Air Freight Stations (AFSs)


An Inter-Ministerial Committee (IMC) was constituted in 1992 to act as a single window for clearance of proposals to set up Inland Container Depots (ICDs), Container Freight Stations (CFSs) and Air Freight Stations (AFSs). The Ministry of Commerce and Industry Guidelines, 1992 prescribed the requirements for setting up of the ICDs and CFSs. The subsequent guidelines issued by the Department of Commerce (DoC) and Central Board of Indirect Taxes and Customs (CBIC) set the rules for establishment & functioning of these facilities. The matters relating to setting up of ICDs/CFSs/AFSs were brought under CBIC in 2018. Accordingly, the Board had reconstituted the Inter-Ministerial Committee vide order issued under F.No. 434/04/2018-Cus.IV dated 20.06.2018.

In the last two decades, both the cargo volumes and capacities of ICDs/CFSs have increased manifold. A few key initiatives transforming the manner of trade in recent years, such as implementation of the Authorized Economic operator (AEO) programme, rising penetration of the Direct Port Delivery(DPD) and Direct Port Entry(DPE) initiatives, Self-Sealing (RFID seals), Self-Assessment, Electronic Cargo Tracking System (ECTS) and RMS based facilitation have completely changed the operation of Export-Import logistics. The CBIC is also targeting higher DPD, DPE numbers with minimum but more effective Customs interventions aided by technological measures.

Similarly, physical infrastructure has undergone exponential improvements with the development of expressways, national highways connecting ports to hinterland. Many new private ports & terminals within the existing ports have come up on both Western and Eastern coasts of the country. The operationalisation of Western and Eastern Dedicated Freight Corridors is near future is expected to completely change the dynamics of cargo movement.

At present, majority of CFSs are located up to 50 kms away from the port and are concentrated in high numbers in the western and southern India. ICDs on the other hand are concentrated in the northern hinterland. Similarly, the traffic across ICDs is also not distributed evenly, only 25 ICDs cater 83% of the total volume (in terms of Shipping Bills and Bills of Entries).

Therefore, on account of plethora of changes in the policy, technology landscape and the logistics ecosystem over the time, there is a need for revising the policies and procedure for setting up of new ICDs/CFSs/AFSs to meet the requirement of the changing paradigm and the aspirations of the trade.

Accordingly, the new policy:

i. takes into account the present capacity, future growth potential and regional imbalances and also addresses the need for bringing uniformity, transparency and seamless approval process;

ii. addresses the identified regulatory and logistics concerns associated with the hard and soft infrastructure of ICDs/CFSs/AFSs in India;

iii. establishes a framework of functional requirements pertaining to the design and operation of dry ports, as well as establish certain processes to enable sustainable growth of the sector; and

iv. aims to lay down appropriate institutional, administrative and regulatory frameworks for development and smooth operation of ICDs/CFSs/AFSs, including procedures for regulatory inspection and the execution of applicable customs control and formalities.

Distinction between ICD, CFS and AFS

Inland Container Depot (ICD):

An off seaport (or port) facility_ having such fixed installations or otherwise, equipment, machinery etc. providing services for handling / clearance of laden import, export containers for home use, warehousing, temporary admissions, re-export etc under customs control and with storage facility for customs bonded or non-bonded cargo.

An ICD is a “self-contained Customs station” like a port or air cargo unit where filing of Customs manifests, Bills of Entries, Shipping Bills and other declarations, assessment and all the activities related to clearance of goods for home use, warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export, transshipment, etc., take place. An ICD would have its own automated system with a separate station code (such as INTKD 6, INSNF6 etc.) being allotted by Ministry of Commerce and with in-built capacity to enter examination reports and enable assessment of documents, processing of manifest, amendments, etc.

Container Freight Station

An off seaport (or port) facility having such fixed installations or otherwise, equipment, machinery etc. Providing services for handling / clearance of laden import, export containers for home use, warehousing, temporary admissions, re-export etc under customs control and with storage facility for customs bonded or non-bonded cargo.

Though by definition, both ICD and CFS are similar, a CFS is only a Customs area notified under section 8 of the Customs Act, 1962, located in the jurisdiction of a Commissioner of Customs exercising control over a specified Customs port, airport, LCS/ICD while an ICD is notified under section 7 of the Customs Act, 1962. A CFS cannot have an independent existence and has to be linked to a Customs station within the jurisdiction of the Commissioner of Customs. It is an extension of a Customs port set up with the main objective of decongestion. In a CFS only a part of the Customs processes mainly the examination of goods is normally carried out by Customs besides stuffing/de-stuffing of containers and aggregation/ segregation of cargo. Thus, Custom’s functions relating to processing of manifest, import/ export declarations and assessment of Bill of Entry/Shipping Bill are performed in the Custom House/Custom Office that exercises jurisdiction over the parent port/airport/ICD/LCS to which the said CFS is attached. In the case of Customs Stations having facility of automated processing of documents, terminals are provided at such CFSs for recording the result of examination, etc. In some CFSs, extension Service Centers are available for filing documents, amendments etc. However, the assessment of the documents etc. is carried out centrally.

An ICD may also have several CFSs attached to it within the jurisdiction of the Commissioner of Customs just as in the case of a port.

Air Freight Station (AFS)

An off-airport common user facility equipped with fixed installations of minimum requirement and offering services for handling and temporary storage of import and export cargo etc.

While CFS handles maritime cargo, an AFS is meant to handle air cargo.

Important centers of activity relating to ICDs/CFSs/AFSs

Rail Siding (in case of a rail-based terminal): The place where container trains are received, dispatched and handled in a terminal. Similarly, the containers are loaded on and unloaded from rail wagons at the siding through overhead cranes and / or other lifting equipment.

Container Yard: Container yard occupies the largest area in the ICD/CFS. It is stacking area where the export containers are aggregated prior to dispatch to port, import containers are stored till Customs clearance and where empty containers await onward movement. Likewise, some stacking areas are earmarked for keeping special containers such as refrigerated, hazardous, overweight/over- length etc.

Warehouse: Public warehouse appointed under section 57 or private warehouse licensed under section 58 is a covered space/shed where export cargo is received and import cargo stored/delivered; containers are stuffed/stripped or reworked; LCL exports are consolidated and import LCLs are unpacked; and cargo is physically examined by Customs. Export and import consignments are generally handled either at separate areas in a warehouse or in different nominated warehouses/sheds.

Gate Complex: The gate complex regulates the entry and exits of road vehicles carrying cargo and containers through the terminal. It is place where documentation, security and container inspection procedures are undertaken.

Functions and benefits of ICDs/CFSs/AFSs

The primary functions of ICD/CFS/AFS include receipt and dispatch/delivery of cargo, stuffing and stripping of containers, transit operations by rail/road to and from serving ports; customs clearance, consolidation and desegregation of loose Container Load (LCL) cargo, temporary storage of cargo and containers, reworking of containers; and maintenance and repair of container units.

ICD/CFS/AFS, inter alia, offer the following benefits to the trade, namely, serving as concentration points for long distance cargo movement and transit facility, making available customs clearance facility available near the centers of production and consumption free movement of cargo at gateway ports and decongesting the ports, reducing the costs of transport, inventory, demurrage and level of pilferage; enabling intermodal transshipments 86 repositioning of containers for shipping lines.

Criteria for new ICDs/CFSs/AFSs

Geographical Criteria for approvals

It has been seen in the past that the tendency of developers to set up facilities in few selected areas led not only to proliferation at those centers but also has resulted in investments being made near big cities/ports, far from the manufacturing/exporting units. Moreover, such distorted penetration results in higher costs for inland units apart from creating manpower issues for the departments.

Therefore, it has been decided to group the country in three types of areas for the purposes of opening of new ICDs/CFSs as under following:

  • Green Zone: States low on ICD/CFS infrastructure. These will be open for proposals (Himachal Pradesh, Bihar, Jharkhand, West Bengal, Sikkim, Assam, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya and Telengana and Union territories of Jammu and Kashmir and Ladakh);
  • Blue Zone: States where the proposals can be accepted only for specific trade generating locations with no existing facilities or with over utilized facilities (Uttarakhand, Uttar Pradesh, Chattisgarh, Odisha, Andhra Pradesh, Goa, Karnataka and Kerala and Union Territories of Pudhucherry, Diu and Daman); and
  • Red Zone: The identified states have adequate ICD/CFS infrastructure. These may be closed for any new CFSs development indefinitely. However, in exceptional cases

IMC may approve the setting up of ICDs in trade generating locations with high export & import potential and need of new facilities (all the states and union territories not listed in Green and Blue Zones).

Distance of ICD from ports – Rail transport is price competitive with road transport when the lead distance is more than 200 kms. Rail connected ICDs are favored at hinterland locations with lead distances up to 1,500 kms in north India. The development of ICDs within 200 kms of a connecting/Nearest serving seaport shall be discouraged. The measure is expected to further encourage DPD & DPE movement between hinterland & ports. For calculation of distance, the chargeable route by rail and shortest road (National Highway / State Highway) from serving port shall be considered. This rule shall be applicable across all geographical zones.

Distance between ICDs – No Greenfield ICD shall be permitted to be established within 100kmsdistance from existing ICD. Distance will be referred as chargeable railways route (both directions) between ICDs and shortest road distance(National Highway / State Highway, both directions) in case of road linked ICD. This rule shall be applicable across all Geographical zones.

Development in States with low Logistics Infrastructure – To support infrastructure development in states with limited logistics infrastructure, priority should be given to Identifying and promoting ICD/CFS/AFS facilities where presence of such facilities is limited. These are clustered in Green Zone as proposed above. IMC can give relaxation on Distance rules in Green Zone.

National Logistics Action Plan/ Policy – The approval and notification of all new ICD/CFS, including existing and new MMLPs will be processed in consonance with the national logistics action plan/policy.

Inland National Waterways – Development of ICDs based on Inland National Waterways as mode of transportation will be encouraged with relaxation being given on Geographical Zone& Distance rules.

Railways Freight Corridors – Approval of Greenfield ICDs directly along/Linked with DFCs (Eastern & Western DFCs and any new operationalized railways freight corridor) will be accorded with no more than one ICD directly connected with these corridors within chargeable distance of 100 kms in both directions. It is expected that some of existing ICDs will get connected directly to freight corridors and while some will operate in Hub & Spoke model in future. With priority of increasing utilization of Freight corridors as they operationalize and lowering the logistics costs, IMC can accord approvals to these facilities in any zone while maintaining distance rules on the corridors.

Exceptions – IMC can approve creation of additional facilities near existing ICDs (all 3 zones) if the demand exceeds the existing capacity of ICDs/CFSs in trade generating location/area. This can be determined by analyzing the existing utilization of ICDs in designated trade generating location/ area.

In no case a new CFS shall be set up which is linked to an ICD. Only CFSs connected to ports in the permissible Zones (as mentioned above) shall be allowed after considering existing capacity and utilization parameters.

AFSs are relatively new to India, hence, in the case of AFSs, the IMC while considering the application, will only take into account the demand-supply gap and take appropriate decision.


The facility must be economically viable to manage and attractive to the users, to the railways for full train load movements; to other transport operators; seaports; shipping lines; freight forwarders etc. and must operate at certain minimum amount of traffic. The applicants must therefore study carefully the viability of the project from the point of view of the TEU traffic availability.

In the time of growing international trade, the creation of any infrastructure facility must commensurate with the generation of demand in actual terms. This is particularly important as such facilities have a long gestation period for being fully operationalized. Accordingly, the minimum threshold performance shall be 7200 TEUs/consignmentsl per year (two way) for an ICD and 1200 TEUs/ consignments per year (two way) for a CFS. However, no such threshold performance is prescribed for an AFS.


The minimum area requirement is seven hectare for ICD having minimum area of four hectares as Customs Notified Area and minimum one hectare nominated for DPD 8s DPE nominated space. For states in Green Zone, ICD with three hectares for customs notified area and one hectare for DPD 8a DPE may be considered. The minimum area requirement shall be two hectare for a CFS. For AFS 1000 Sq. meters of covered area each for imports and exports respectively shall be made available.

Ownership of Land – The applicant must have the legal rights over the land which is proposed for ICD/CFS construction. If the land is not owned and the land is leased, the lease agreement with lessor must be for period of 30 years. Change of Land Use certificate, wherever required shall accompany the application and land should be free from acquisition proceeding at date of application. The land parcels should be contiguous with only exception for setting up non-bonded storage facility.

Other Criteria

Legal entity – The applicant must be a legal entity in India under applicable law. The entity must possess a valid GST registration and should have been operating for a minimum period of three years.

Prior experience – The applicant must have prior experience of operating as CCSP or should have other trans-border logistics experience such as logistics service provider including customs brokers, transporters, freight forwarders, shipping lines and port terminal operators.

Application and Approval Procedures

Setting up of new ICD/CFS/AFS

The application for setting up of new ICD/CFS/AFS shall be submitted to the Member (Customs), CBIC, Office of the Commissioner (RI&I), 5th floor, Hudco Vishala Building, Bhikaji Cama Place, New Delhi 110066, email: mgt.valavan@nic.in, in the format provided in Annexure-I. Application shall also accompany a Detailed Project Report (DPR) in format provided in Annexure-II. The application should be submitted in six copies with one advance copy to jurisdictional Commissioner of Customs for his recommendation on feasibility and five copies to Member (Customs), CBIC. No application fee will be charged from the applicants. Without waiting for the report from jurisdictional Commissioner, the other copies of the application shall be sent by office of the Commissioner (RI&I) to all the members of IMC for their comments.

Applicants shall familiarize themselves with statutory Customs requirements in relation to bonding, transit bond, security, insurance, other necessary procedural requirements and cost recovery charges payable before filing the application.

The jurisdictional Commissioner of Customs, upon receipt of the advance copy, will examine the feasibility of the proposal and send his recommendations, along with reasons thereof, to Member (Customs), CBIC, within 30 days of receipt of the application. The recommendations of jurisdictional Commissioner shall take into account manpower availability, existing ICD/ CFS capacity and its utilization, future projections, reduction in logistics cost and the impact on local trade stakeholders of the new proposed facility in lines with policy. The jurisdictional Commissioner shall do his own analysis based on historical data and existing facilities working in the vicinity. The jurisdictional Commissioner while forwarding his recommendation shall make a categorical statement whether an application merits consideration or rejection.

On receipt of the proposal, the members of the IMC will furnish their comments within 30 days.

Proposals for setting up ICD/CFS/AFS will be considered on merits by the IMC. Normally, the IMC meetings will be held twice in a year. The committee may approve or refuse to grant approval for setting up of ICD/CFS/AFS. The recommendations of the jurisdictional Commissioner will be a relevant factor but not necessarily binding on the IMC. The IMC can independently decide about approval/rejection of any project based on the valid considerations. The applicant shall not make any investment before obtaining the approval from IMC. The “in-principle” approval from the jurisdictional Customs Commissioner regarding the feasibility of the proposed facility shall not be considered as final. Any investment made by the prospective developer before the approval of IMC shall be at the risk of developer and as a result would not constitute a relevant factor for approval of the facility.

On approval of a proposal, a Letter of Intent (LOI) will be issued to the applicant with conditions as may be considered necessary, which will enable applicant to initiate steps to create infrastructure. The applicant would be required to set up the infrastructure within one year from the date of approval.

The LOI will have a validity of 12 months. It will be further extendable by a maximum of 12 months once only. Only in exceptional cases, IMC would further extend it by 6 months in one go for maximum 2 terms. Therefore, no extension after this time will be provided and proposal will be deemed as rejected. Once rejected, new proposal must be submitted afresh.

The IMC has right to suspend or revoke the approval granted in the following cases: i. on breach of any conditions of applicable law or contained herein; or ii. the setting up/continuance of the ICD/CFS/AFS would be prejudicial to public interest; or iii. if the ICD/CFS/AFS entity or any of its promoters is convicted of an offence under the provision of any Act in force.

Applications for other purposes

Change of CFS to ICD and vice versa and notification of AFS in Existing ICD – When a CFS operator wants to upgrade the facility to ICD or convert the ICD to CFS, he shall approach the IMC for approval for such a change. Such applications shall be processed in the similar manner as that of a new facility.

Change in Ownership – Jurisdictional Commissioner of Customs can approve the change of custodian of existing facilities under section 45 of the Customs Act, 1962 and the change may be informed to the Commissioner (RI&I). There will be no need to approach IMC for change in ownership provided the residual entity meets turnover and other requirements established within the framework of this policy. However, any pre-condition prescribed in this policy which the original developer is required to fulfill, shall be met by the new owner as well. The new owner shall ensure and confirm that all the liabilities under the Customs Act, 1962 and regulations thereof, payable by the existing operator are duly discharged before such change of ownership.

Change in Location – For change of location of an existing facility, the operator of the facility shall approach IMC. If the new location is in the same locality of the existing cluster of CFSs/AFSs, and serves to the same gateway port, the IMC after consulting the jurisdictional Commissioner of Customs, may approve such request. However, in case such change of location involves substantial geographical change (outside existing District or involves change of port to which the CFS serves), it should be treated as closure of the existing facility and setting up of a new facility.

Post Approval Obligations

Operationalising the facility

The applicant shall take all necessary actions to operationalise the facility within the validity period of the LOI. The applicant must put up the required infrastructure and meet the regulatory requirements in compliance with applicable law to become functional. The Check list for various requirements is given at the Annexure-III.

The applicant, after receipt of LOI, shall send monthly progress report to jurisdictional Commissioner of Customs in the proforma as may be prescribed by him. Failure to submit progress report would have an adverse effect in cases where extension is to be sought. Non-compliance to send reports shall be a valid ground for rejection of request for extension.

After development of infrastructure as per requirements, applicant shall apply to CBIC for notification of facility as ICD or AFS under Section 7(aa) of Customs Act, 1962 through the jurisdictional Commissioner of Customs.

Further, applicant will approach jurisdictional Commissioner of Customs to issue notifications under section 8 of the Customs Act 1962 for approving landing place and specifying limits of Customs area and under Section 45(1) of the Customs Act, 1962 for declaration as “Custodian”.

These notifications will be issued only if the Board or the jurisdictional Commissioner of Customs, as the case may be, is fully satisfied with the readiness of the facility and fulfillment of compliances under the Handling of Cargo in Customs Areas Regulations (HCCAR), 2009.

Further, after the issuance of LOI and before the issuance of the notifications as mentioned above, the jurisdictional Commissioner of Customs shall coordinate with the Directorate General of Human Resource Development (DGHRD) for creating the required numbers of cost recovery posts.

The jurisdictional Commissioner of Customs while forwarding the recommendation for issuance of notification shall:

a. satisfy himself about the readiness of the facility including fulfillment of the requirements listed at Annexure-III;

b. ensure that the required number of cost recovery posts are created; and

c. confirm that once the facility is notified the Commissionerate will be able to deploy the officers.

Regulatory and other compliances

The facility operator who is appointed as custodian of the goods meant for import and export shall be required to comply with provisions of the Customs Act, 1962, rules and regulations thereof and circulars/instructions issued from time to time by the Board in relation to the custody, storage, handling and disposal of cargo including the Handling of Cargo in Customs Area Regulations, 2009.

The operator shall comply with the laws relating to Indian Railways (for safety of siding and smooth rake operations in the facility), labor, environment (including the laws

relating to the storage of hazardous goods, legal metrology (certification for installed weighing instruments including weight bridges etc.) food safety (certification of facility by FSSAI for storage) etc.

The operator shall also comply with the circulars/instructions issued by the Board on cost recovery charges from time to time for the officers deployed. The payment of cost recovery charges for the officers and staff deployed and exemption from such payment shall be governed by the extant rules, policy and circulars in this regard.

No alteration of the plan of the ICD / CFS shall be made without the concurrence of the jurisdictional Commissioner of Customs. Further, no reduction in minimum prescribed physical area shall be allowed.

For Rail linked ICDs, investors will be required to provide at their own cost all infrastructure facilities including land, track, and maintenance of assets including track, rolling stock, etc. as per extant railway rules applicable to such sidings. The cost of the railway staff would be governed as per the prevailing Indian Railways policy.

The custodians should strictly follow any guidelines/directions issued on account of force-majeure of Government of India from time to time.

Record keeping handling, receipt and storage

For the proper discharge of duties, the custodian shall execute a Bond covering the value of the goods stored in the ICD/CFS with the Assistant/Deputy Commissioner of Customs. The custodian shall ensure that all goods held in the ICD/CFS are adequately covered as per extant circulars issued by the Board.

The custodian shall provide safe, secure and spacious place for loading, unloading and storage of the cargo.

The custodian shall also provide sufficient modern handling equipments in operating condition for handling the cargo in the notified area.

The custodian shall be responsible for the proper receipt, handling, storage and shall be accountable for the loss of imported goods after the landing and before clearance, and also for goods meant for export/transshipment. They shall also maintain proper records of all such goods including the records of goods which are cleared with the permission of the Customs or disposed of, under section 48 of the Customs Act 1962 or otherwise. Further, custodians shall share available data with the Government Departments/Agencies ensuring reasonable commercial and individual privacy.

If any imported goods are pilfered or lost after unloading in the customs area while in the custody of the custodian, then in terms of provisions of section 45(3) of the Customs Act 1962, they shall be liable to pay the duty on such pilfered goods.

Infrastructure and other facilities

The custodian shall also take steps to bring about necessary improvements in the infrastructural facilities and other amenities required to be provided to the trade and to Customs staff, as may be necessitated from time to time, consequent upon the growth in the volume of Import and Export Trade handled at the ICD/CFS.

In case the custodian wants to sublet any of the functions inside the customs area or connected with the customs area, the same should be done with prior approval of the Commissioner of Customs and the custodian shall remain responsible for the omissions and commissions of the said agency.

Performance Monitoring

The Commissioner of Customs shall ensure that annual audit/inspection of the notified facilities are conducted in terms of the circulars/ instructions issued in this regard.

The jurisdictional Commissioner of Customs shall, based on the findings of the annual inspection report or otherwise, take necessary remedial action including penal action, for any contravention, under the Customs Act, 1962 read with HCCAR, 2009. It may be noted that each violation shall be treated as separate for the purpose of initiating penal actions.

The jurisdictional Commissionerates must list out functional, non-functional and approved count of ICDs on their websites, latest figures of volume handled, Infrastructure profiles, compliance with HCCAR 2009 rules to be maintained on month on month basis on the Commissionerate’s web-portal.

Term, renewal and de-notification of the facility

The duration of the award for the operation of the facility shall be governed by HCCAR 2009 unless otherwise mentioned in any other guidelines. The applicant shall get the award renewed by the jurisdictional Commissioner of Customs.

At the time of renewal, the jurisdictional Commissioner of Customs shall satisfy himself about the functioning of the facility including the minimum volume projected at the time of initial proposal.

The ICDs not meeting the minimum prescribed threshold performance for four consecutive financial years will be considered for de-notification by the Board based on the recommendation of the jurisdictional Commissioner of Customs. As regards CFSs, jurisdictional Commissioner can de-notify the facility if it failed to meet the prescribed minimum threshold performance for four consecutive financial years. In the case of AFSs, the Board may analyze the performance of the facility and may consider the de-notification wherever necessary, based on the recommendation of the Jurisdictional Commissioner of Customs.

The jurisdictional Commissioners of Customs can order for closure of a facility when requested by a custodian. Such requests should he approved within 6 months subject to clearance of dues of Cost Recovery Charges, disposal of detained/Seized cargo & cases against CCSP if any. Jurisdictional Commissioner will take no dues certificate thereafter commissioner may de-notify any CFS/AFS and in the case of ICD he shall forward the proposal for de-notification to the Board.

Scope and applicability

The policy and guidelines prescribed here will be applicable to all the new proposals that are submitted to IMC after the date of issue of this circular. The proposals already submitted but are yet to be considered by the IMC shall also be governed by these guidelines. As regards the existing facilities and the proposals for which Letter of Intent has already been issued but the facilities are yet to commence their operations, shall also be governed by these guidelines to the extent to which they are applicable (such as post approval obligations, term, renewal and de-notification etc). The proposals which have been approved by IMC will be scrutinized under old policy.

The Circular can be accessed at: https://www.cbic.gov.in/resources/htdocs-cbec/customs/cs-circulars/cs-circulars-2020/Circular-No-50-2020.pdf