Govt Exempts Customs & Excise Duty on Bunker Fuels


NEW DELHI: In order to promote movement of cargo through coastal waters, the government said it has exempted customs and excise duty on the use of bunker fuels by Indian ships.

One of the issues hindering the growth of coastal shipping has been the levy of customs and central excise duty on bunker fuels which raises cost of transportation, said an official statement.

"This issue was resolved by...exempting Customs and Excise duty leviable on bunker fuels, namely IFO 180 CST and IFO 380 CST used in Indian flag vessels for transportation of EXIM and empty containers between two ports in India," it said.

The exemption has further been extended by department of revenue in a notification on September 17 to Indian flagships carrying a mix of EXIM, empty and domestic containers, the shipping ministry said.

"This tax incentive for transportation along the coast will go a long way in enhancing Indian tonnage as well as in promoting development of transportation hubs in India," it said.

The ministry of shipping is actively considering various measures to promote modal shift of cargo from roads to coastal waters not only to decongest roads but more importantly to harness the higher fuel efficiency of coastal movements vis-a-vis roads, as well as to reduce carbon footprint, it added.

Transport of cargo through waterways has been the top agenda for the ministry in view of the mode being eco-friendly and cost effective, road transport, highways and shipping minister Nitin Gadkari had said earlier.

"Unfortunately, this mode of transport is yet to be tapped in the country whereas this mode accounts for 47 per cent of China's transportation and 40 per cent of Europe's transport.

"The total transportation cost through waterways comes to barely 30 paise/km in comparison to Re 1/km through railways and Rs 1.5/km through road. Unfortunately, this mode of transport is yet to be tapped in our country," Gadkari has maintained.

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Source: PTI