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Tuesday, October 26, 2021

To curb shortage, govt eases re-export timeline of containers by 3 months

Ordinarily, containers kept in the country beyond six months are subject to import duty to promote faster turnaround.

By: ENS Economic Bureau | New Delhi |
September 26, 2021 3:42:19 am
However, the rule was seen as an incentive for the export of empty containers to avoid the duty even as Indian exporters deal with high freight rates and delays due to low availability of empty containers.

In an attempt to ease the container shortage being felt by exporters, the government on Saturday announced a three-month extension for re-export of containers without attracting import duty to prevent export of empty containers. Ordinarily, containers kept in the country beyond six months are subject to import duty to promote faster turnaround. However, the rule was seen as an incentive for the export of empty containers to avoid the duty even as Indian exporters deal with high freight rates and delays due to low availability of empty containers.

“As a temporary measure to improve containers available presently for export of containerised cargo and with the aim of promoting export of laden marine containers, the CBIC (Central Board of Indirect Taxes and Customs) has issued a guidance to field offices to extend this period by 3 months,” a government release said. The exemption is available in cases where the expiry of the initial six-month period is on or before March 31, 2022 and the containers are re-exported in a laden condition.

The release noted that the existing policy was creating “a perverse incentive among shipping lines to export empty containers to evade duty payment on containers which are lying empty.”

Exporters had approached the Centre to restrict outward shipment of empty containers from Indian ports, with empty containers fetching a premium in the global market as exporters around the world deal with the shortage.

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