In the article "Developing the wrong kind of port" (April 20), former shipping secretary Michael Pinto has made a meaningful argument for the development of smaller ports and inland waterways. However, he has incorrectly stated that coastal shipping does not come under Custom's jurisdiction. Chapter XII of the Customs Act, 1962 (Sections 91 to 99) deals with coastal goods and vessels carrying them. It mandates the consigner to present a bill of coastal goods to the proper officer of Customs, who is statutorily empowered to grant permission for loading/unloading and arrival/departure of such goods.
Michael Pinto replies: Deepak Pareek is perfectly correct when he quotes Sections 91 to 99 of the Customs Act and highlights it applicability to coastal shipping. The idea behind these sections is to regulate the treatment of coastal goods in ports where import and export trade routinely takes place. Such goods, because they are usually domestically produced and consumed, are not subject to customs duty. Therefore, you lay down a regime that ensures that even though a customs office is present in an international port to assess the duties payable on exim cargo, domestic (coastal) cargo at that port is exempt from payment of such duty. To do this, a bill of coastal goods is prepared and presented to the customs officer who then gives the required permission for loading/unloading and so on
My article talks about small ports at which foreign going vessels will not call but which will be reserved for coastal vessels. Such ports will normally not have any customs presence because they do not cater to exim trade. If we develop a string of such ports around the coast and ensure that they are used only for coastal cargo we give a huge fillip to coastal shipping because transactional costs will be low, partly because overhead costs will be less in such ports and, more importantly, because of the absence of customs formalities.
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Deepak Pareek Faridabad
Michael Pinto replies: Deepak Pareek is perfectly correct when he quotes Sections 91 to 99 of the Customs Act and highlights it applicability to coastal shipping. The idea behind these sections is to regulate the treatment of coastal goods in ports where import and export trade routinely takes place. Such goods, because they are usually domestically produced and consumed, are not subject to customs duty. Therefore, you lay down a regime that ensures that even though a customs office is present in an international port to assess the duties payable on exim cargo, domestic (coastal) cargo at that port is exempt from payment of such duty. To do this, a bill of coastal goods is prepared and presented to the customs officer who then gives the required permission for loading/unloading and so on
My article talks about small ports at which foreign going vessels will not call but which will be reserved for coastal vessels. Such ports will normally not have any customs presence because they do not cater to exim trade. If we develop a string of such ports around the coast and ensure that they are used only for coastal cargo we give a huge fillip to coastal shipping because transactional costs will be low, partly because overhead costs will be less in such ports and, more importantly, because of the absence of customs formalities.
Editor
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number