New service tax circular would expedite refund claims: Fieo

COMMENTING on the recent service tax circular for claiming refunds through ICES with regard to specified services availed of for export of goods, Mr Ramu S. Deora, President of Federation of Indian Export Organisations (Fieo), said that it would make refunds quicker, considering that the exporter will have to declare his intent on the shipping bill, which would be processed just like the drawback shipping bill.

Expressing confidence that the new dispensation under ICES would create an enabling environment for service tax refunds, the Fieo chief pointed out that getting refunds had become difficult following the tax offset facility under Rule 2 of the Cenvat Credit Rules, due to the merger of service tax credit with Cenvat credit.

As regards the non-drawback shipping bills, Mr Deora made it clear that once the Export General Manifest (EGM) is filed, the bills would move separately, get processed and sanctioned on the ICES. "In either case, shipping bill itself will be the basis for claiming refund".

Mr Deora said the draft circular also spoke of plans for creating a separate service tax directory in the ICES for the specified services, along with the specified rate for each of these services. "These rates would be similar to an AIR (all-industry rate), which is being proposed for these services. If an exporter wants a refund on the basis of actual input taxes paid, the ICES route cannot be used and filing through field formations would be required", Mr Deora explained.

The Fieo chief also mentioned that scrolling for both drawback and service tax would take place together in the case of drawback claims. "For non-drawback claims, the service tax refund is scrolled once the EGM is filed", he said.

Source : Exim News Service - MUMBAI, Sept. 12

 

Growth spectacular but challenges ahead will hit exports: Fieo

COMMENTING on the July 2011 trade data, Mr Ramu S. Deora, President of Federation of Indian Export Organisations (Fieo), said that the growth in exports, considering the numerous challenges, is indeed spectacular and is a measure of the entrepreneurial skills of Indian exporters, coupled with their aggressive intent of diversification both at the product and country level.

Acknowledging that the government too had played a part in the feat through its market-linked incentives, the Fieo chief said that the growth of 81 per cent in exports, on a not-so-low base of July 2010, was unheard of in the recent history of Indian exports. He complimented the exporters of engineering goods, gems and jewellery, readymade garments, manmade yarn, cotton yarn fabrics, chemicals, electronics and others for chipping in to bolster the growth.

According to the Fieo chief, a comparison of the export figures of the last four months of 2011 with the same period of 2010 showed that the country was adding around $10 billion, resulting in $26-27 billion in exports every month.

Mr Deora added that imports too were increasing, with a trade deficit of $42.7 billion in the first four months, thus projecting a fiscal deficit of $125 billion in 2011. Therefore, "the government must give a boost to exports to bridge the deficit", he stressed.

Drawing attention to the challenges facing Indian exports in view of the recent global developments, the Fieo President said these could not be ignored as they would have serious bearings on the country's exports in the coming two quarters.

With regard to the problems on the domestic front, i.e. the hike in interest rates for exports and uncertainty over continuance of the DEPB scheme, the Fieo chief, while admitting that it had further accentuated the problem, apprised that both issues had been brought to the notice of the Finance and Commerce Ministries, who need to quickly act on them to lessen the discomfiture of exporters.

He felt that exports would see a dip in Q3 and Q4.

Source : Exim News Service - MUMBAI, Sept. 11

 

Three-month extension for duty-free sugar imports

The Union government has decided to extend the duty-free imports of raw and white sugar by three months till November 30.

According to a notification, the extension given to the tax-free imports will be effective from September 1. It may be recalled that the country had earlier permitted tax-free sugar imports until August 31, following the cancellation of a 60 per cent tax reinstated on April 1.

Expectations are rife that India, which is the world’s second largest producer after Brazil, is likely to produce 26 million tonnes (mt) of sugar in 2011-12 (October-September) against a government estimate of 24.2 mt for the year.

Source : Exim News Service - NEW DELHI, Sept. 11

 

Ennore Port stake sale plan deferred due to unviable outlook

WITH the Shipping Ministry considering the government's plan for a stake sale in Ennore Port as 'unviable' at present, the proposal has been put on hold.

An official apprised that the Ministry had requested the Department of Disinvestment to wait for two years as it reckoned that disinvestment would be a viable option only after the projects take off at the Port.

The official pointed out that work on the rail connectivity and container terminal projects, being implemented on PPP basis, were in progress and expected to be concluded in two years. It may be recalled that Ennore Port was originally conceived to handle thermal coal to meet the needs of the Tamil Nadu Electricity Board, but the scope had to be expanded subsequently in view of Tamil Nadu’s plan to set up a power project.

Source : Exim News Service - NEW DELHI, Sept. 11

 

Port workers oppose judicial panel revising wages

MAJOR port and dock workers federations have taken exception to the Shipping Ministry’s decision to appoint a Judicial Commission (JC), with effect from January 1, 2012, for revising wages and other related service conditions for workers.

Following a meeting in New Delhi recently, the federations have resolved to brace themselves to fight the development.

The government’s decision to form the commission, instead of settling the issue of wage revision through the Bipartite Wage Negotiating Committee (BWNC), went against normal practice, said Mr T. Narendra Rao, General Secretary of one of the federations. He pointed out that the Indian Ports’ Association had officially communicated to the federations on the issue only on September 5.

Apprising that the federations were opposing the government’s move as the decision was against the principle of collective bargaining, which has been in play in the port sector for several decades, Mr Rao contended that "this is nothing but an ill-motivated attempt to distract the trade union movement in the port and dock industry."

He disclosed that the port and dock workers have unanimously resolved to organise massive demonstrations at the Major Ports on September 29. "The federations have also made a plea to the Shipping Minister, Mr G. K. Vasan, to intervene in the matter by taking cognisance of the situation in the port industry and again constituting the BWNC," he said.

Source : Exim News Service - KOCHI, Sept. 11

 

Oilmeal exports rise 14.5 pc in Aug.

A leading trade body has apprised that oilmeal exports climbed 14.5 per cent to 279,469 tonnes in August from 244,075 tonnes a year earlier, owing to more oilseeds being available coupled with good demand from South-East Asia.

According to a statement issued by the Solvent Extractors’ Association of India (SEAI), oilmeal exports in the first five months of the current fiscal shot up over 60 per cent to 1,639 million tonnes compared with 1,021 million tonnes a year ago.

However, soyameal exports declined six per cent last month to 165,610 tonnes due to less availability of soyabean for crushing, following the export of the bulk of the crop in the first half of this year.

Source : Exim News Service - Mumbai, Sept. 11

 

MoS not keen to disinvest DCI due to 'low valuation'

Given the Dredging Corporation of India’s (DCI) current low valuation, the Ministry of Shipping (MoS) has dropped enough hints to the effect that it is not in favour of the proposal, by the Disinvestment Department, to sell part of the government’s stake in the PSU as of now.

Maintaining that disinvestment in DCI was not feasible at current valuations of the company, a MoS official said that it had reported a profit of only Rs 39 crore in the last fiscal. While the government has already divested 22.5 per cent of its stake in DCI, the official pointed out that it could now only disinvest up to 25 per cent. Hence, the official, while maintaining that there is not much scope left, emphasises that the time too is not ripe.

It may be recalled that the Department of Disinvestment had suggested to the government to go ahead with divestment in DCI, as part of achieving the target of Rs 40,000 crore in this fiscal by selling stakes and raising fresh equity in PSUs.

Source : Exim News Service - NEW DELHI, Sept. 11

 

Cargo modularisation in India-a key challenge in project cargo movement

In today’s scenario, one of the key success areas for any EPC (Engineering, Procurement & Construction) contractor is compacting the lead time in Erection and Commissioning (E&C) activity and bringing down the construction cost, while at the same time maintaining high quality standards of the job being performed at the project site.

All this can be made possible only when the components/packages to be installed at the site are received in modular form rather than in a considerable dismantled form. Considering the fact that most of the project sites in India are at remote locations and there is dearth of skilled labour at these sites, it is highly imperative that the fabrication and assembly work at the project site is minimised. Therefore, cargo modularisation plays a vital role for any EPC contractor for seamless execution of a project.

However, the factors responsible for limiting cargo modularisation in India are:

a) Insufficient road widths at several locations en route, for haulage of the ODC packages to the project sites.

b) Non-availability of bypasses at several locations and the routing of packages therefore through congested areas.

c) Restricted vertical clearances of RuBs (Rail under Bridges) at several places.

d) Multiple RTO norms applicable during inter-state movement of such ODC packages.

e) Heavy traffic density on National Highways due to their limited network, thereby limiting the movement of such packages.

f) Cost of extensive civil works in hauling such packages, in addition to the considerable delays.

It has, therefore, become necessary that for all mega projects in the core sectors of the economy, which are projects of national importance, the roads to the sites should be given National Highway status to be able to cater to larger ODC modular size packages. Also, the RTO norms should be unified for fast-track clearance of these packages, under single window.

—Tapan Sahu, Logistics Professional

 

EXIM News

The curious case of CHA not being a forwarder

Has this question ever occurred to you as to why are shop ping malls today more popular than the traditional markets, or as to why do consumers prefer to do their shopping in the malls rather than going to street-side shops which they have been doing for years?

The answer is very simple. You get all your shopping needs fulfilled at a single location. Then come the reasons of ambiance and quality.

Now imagine that this consumer is an exporter or an importer (let's collectively call them shippers). A typical shipper has various logistics requirements and imagines that his current service provider does only CHA work. In that case, what will the shipper do? Of course, he will be forced to go to a minimum of 5 different agencies, i.e. a transporter, freight broker, warehousing company, Octroi agent and DGFT consultant, and possibly more agencies depending on the type of shipment.

Today, these are the basic service requirements that any shipper (consumer) is looking for from his clearing agent. Now let's take this situation to the next level. This shipper has an import shipment and his supplier is willing to supply the goods only on Ex Works basis. Where does the shipper go now? He will obviously look towards his CHA for a solution, and if the CHA is not able to provide one, the shipper will be forced to go to a forwarder.

Now we have clarity as to why it is so important to offer one-stop forwarding solutions to the shippers at large. In India we have a great tradition of Customs clearing agencies. Some of them have been in existence for 100+ years and have such excellent domain knowledge of the Customs clearing process that their expertise is sought by the Customs Department on many occasions. This means that obviously they are doing something right which has ensured their existence for so many years. Is that good enough in today's context?

The answer is a clear NO. If the clearing agents do not offer all services to the shippers, then the shippers will look for alternative solutions. They will continue to get the clearing activities done from the existing clearing agents and move the forwarding business to some other competent service provider. Here's a case of lost opportunity, and gives strong reasons for today's clearing agents to shift their business models from just being a clearing agent to being international forwarding agents.

Now how does one do that? The answer is fairly simple:

1. Train yourself, your staff and your successors (children) on forwarding. The easiest solution is to send them for two years training with a large international forwarder or a shipping line.

2. Become a FIATA member or become part of a global forwarding network which will give you instant access to a worldwide network.

3. Equip yourself with technology; use the best software available in the market.

4. Do your business with quality—get an ISO certification, get a quality expert to assist you with the process.

The last two points are those of ambience and quality which I referred earlier in the context of the shopping mall. The software gives you the ability to reduce service deliverable time and the quality initiative gives consistency.

The Association of Multimodal Transport Operators of India (AMTOI) is available to assist the Indian transport industry to upgrade and change in order to face the challenges of the new business environment. AMTOI can be reached on info@amtoi.org.

—Vivek Kele, Invitee Member, AMTOI

 

Exim News

Rickmers-Linie upgrades Indian service with addition of new vessels

Rickmers Yokohama makes maiden voyage to Mumbai

Rickmers-Linie, the German liner specialist for project cargoes and heavy lifts in existence for over 175 years, is upgrading its Indian service with the addition of new vessels.

It provides a direct liner service both eastbound and westbound between Europe and India, although calls in Pakistan and the Middle East will be possible on an inducement basis. The base ports served are Hamburg, Antwerp, Genoa, Mumbai, Vizag and Chennai.

Four new vessels were in service. m. v. Linde, Martin, Formation and Fanfare, long-term chartered by the line, while Rickmers Yokohama has just been introduced and called Mumbai on her maiden call last week.

A function was held on board the vessel to mark the occasion, which saw mementoes being presented to Capt. V. Korolkevich, the Master of the vessel. The event was graced by, among others, Mr Shree Kant Singh, Chairman of Mumbai Port Trust (MbPT), Mr Dhruv Kotak, Director of United Liner Agencies (ULA), Rickmers-Linie's general agent in India, Capt. K. D. Giese, Senior Rickmers-Linie representative in India, Capt. V. Dadachanji, Rickmers-Line India Representative, Mr Percy Bilimoria, COO, ULA, Capt. O. P. Dhondiyal, Vice-President (Operations), ULA, Capt. Karkare, Senior Docks Master, MbPT, Capt. S. Kohli, Deputy Conservator, MbPT, and Mr V. S. Kulkarni, Deputy Docks Manager, MbPT.

Rickmers Tianjin is due to be delivered shortly ex China and will also enter the Europe/India service. Both vessels are constructed keeping in mind the restrictions for length and beam at Indian ports.

Built in 2005 and later, the ships Linde, Martin, Formation and Fanfare are 12,800 DWT vessels equipped with twin 120-tonne capacity cranes that can be twinned to lift 240 tonnes. Rickmers Yokohama and Rickmers Tianjin are 17,000 DWT vessels each equipped with two 150-tonne cranes and an 80-tonne crane. This enables them to lift up to 300 tonnes by twinning the two larger cranes. Rickmers-Linie is exploring engaging two more vessels with lifting capacity of 2 x 400T (combined 800T) to introduce in this sector.

All the ships employed on the revamped Indian service offer greater flexibility to serve ports such as Mumbai and Kolkata—where lock-gates restrict the size of vessels—as well as various other ports on both the West and East Coast, on inducement basis.

Mr Gerhard Janssen, Director, Marketing and Sales, Rickmers-Linie, believes that the timing of this upgrade of the service is ideal. "We are seeing increasing demand for break-bulk space on this route. Eastbound, we expect to be loading steel products as a base load, topping off with manufactured goods ranging from mobile cranes and mining products through to specialist railway and power generation equipment. Westbound, there are more and more non-containerisable shipments as India's engineering and manufacturing capabilities develop."

Rickmers-Linie is represented by United Liner Agencies of India (Pvt.) Ltd as its general agents in India since inception in 1994. Rickmers-Linie has a long-standing and very experienced Senior Representative in India in the form of Captain K. D. Giese, and Indian Representative as Capt. V. Dadachanji.

Rickmers-Linie shall be employing six vessels on the Europe India Sector in order to maintain the liner schedule as required by the trade. This will result in a sailing every 7-10 days for the Europe India trade, with newer ships, thus making them competitive in foreign markets. Rickmers-Linie also has an agreement with Shipping Corporation of India (SCI) to carry projects on its behalf on these vessels. A further advantage to Indian business in using newer Rickmers ships will be cost benefits in savings for marine insurance, timely schedules, etc.

Source : Exim News Service - MUMBAI, Sept. 11