Sonowal seeks tax relief on waterway transport fuel, other charges

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New Delhi: In its bid to promote waterway transport, the Ministry of Ports, Shipping and Waterways (MoPSW) urged the concerned Ministries of Central Government to reduce taxes on fuel for ships. It would make the mode of transport cost effective, it said.

It also appealed the State Government to lower the Value Added Tax on the high speed diesel (HSD) meant for ferries, roll-on roll-off and freighters. The MoPWS in a statement said that waterway transportation, which has lower emissions compared to other modes of transport for the same amount of cargo.

Also, there is a significant time and cost saving compared to the traditional transportation modes. Concurrently traffic congestion on road/railways, noise pollution and the accidents on the roads may also get reduced. Such water-based transportation service is an effective measure to lower the logistics costs, reducing travel time and promotion of coastal shipping on several feasible routes.

The MoPSW has also directed all major ports to exempt all berth hiring and vessel related charges being currently levied to the Ro-pax/passenger ferries for the next six months with immediate effect in order to provide some quick respite to this sector from the impact of global surge in fuel prices.

Waterway transport
Union Minister for Ports, Shipping & Waterways Sarbananda Sonowal

The cost of marine fuel ‘low sulphur high flash high speed diesel’ (LSHFHSD) has increased from Rs.76,000/KL to Rs.1,21,000/KL. Similarly, the cost of ‘very low sulphur fuel oil’(VLSFO) has increased from Rs.40608/KL to Rs.80917/KL. It is to be noted here that in the beginning of FY 2021-22 the cost of marine fuel-LSHFHSD used to be 10-15% less than retail diesel-HSD. Hence, effectively the rise is more than 40%.

Union Minister of MoPSW Sarbananda Sonowal has recently met Navneet Mohan Kothari, Joint Secretary (GP Division) of Ministry of Petroleum and Natural Gas and Niba Ram, Joint Commissioner, Department of Revenue, Ministry of Finance and other senior officials to discuss the Impact of high marine fuel prices and GST on ferry operations.

Sonowal has written letters to Union Minister for Finance and Corporate Affairs Nirmala Sitharaman and Union Minister, Ministry of Petroleum and Natural Gas, Hardeep Singh Puri, highlighting this issue and requested them to extend their support for this sector by reducing taxes and price of the fuel respectively.

Also Read: Centre issues draft guidelines for Ro-Ro ferry service in coastal areas

Talking to media persons on Sunday, Sonowal said, “The rising Fuel cost at international level is now making our local Ro-Pax and passenger ferry operations unviable so this exemption of vessel and port related charges by MoPSW will provide the necessary breather to this sector for the next six months. We have also requested MoPNG to consider reduction in fuel prices and Ministry of Finance to lower the associated taxes on it so as to provide the necessary support to this sector in present circumstances.”

The Ro-Pax services implemented by Deendayal Port Authority between Ghogha and Hazira under Sagarmala Programme have reduced travel time from 12 hrs. to 4 hrs. This Ro-Pax and ferry services have carried over 78,000 vehicles and more than 2.6 lakh passengers since inception. Similarly, Maharashtra Maritime Board initiated Ro-Pax ferry service on Mumbai – Mandwa route. Project resulted in saving of around 3 hours of road travel against 45 minutes by sea route. More than 5.5 Lakh passengers have availed this Ro-Pax service and more than 1 lakh vehicles have been transported.

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