The Hindu Business Line : INSA urges Govt to repeal FBT, service taxes

THE Indian National Shipowners Association (INSA) has urged the Government to repeal the service tax, withholding tax and fringe benefit tax to provide the Indian-flag carriers with level-playing field, according to Mr S Hajara, CMD of Shipping Corporation of India, who is also the Vice-President of the association.

Addressing the members of the Bengal National Chamber of Commerce & Industry here on Monday, Mr Hajara said the INSA delegation recently met the Union Revenue Secretary and apprised him of the predicaments facing the shipping industry and the need for taking certain steps in the forthcoming Budget to benefit the industry.

"There is no fiscal or legal regime in India for the shipping sector whereas the shipowners in most other countries, particularly the Flags of Convenience, hardly pay any tax," Mr Hajara said, pointing out that the introduction of tonnage tax had helped the Indian tonnage to grow so much so that there had been 15 per cent growth in tonnage since then. "We need more such steps," he said.

He felt there was no reason why the shipping industry should be kept out of the purview of the infrastructure sector. "The port sector is part of the infrastructure sector but shipping is not but what is port without shipping ?", he asked.

SCI, he said, must emerge as a logistics service provider from the present status of carrier of goods between two ports. "We are planning to enter into terminal management operation and has plans to have our own railway rakes," he said. "We, along with our partners in the consortium, will make fresh bid for the LNG vessel Petronet LNG proposes to acquire on charter for a period of 25 years," he said.

In reply to a question, he made it clear that SCI was withdrawing from the break-bulk operation and had no immediate plans to acquire specialised carriers for transportation of project cargoes or steel.

With China emerging as the driving force of the world economy, the ports on the east coast of India held out big promises particularly in regard to exports of iron ore and imports of coal. In containers, ports of Kolkata and Haldia could only hope to grow through increased feedering operation.

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