GST for sea transport should be reduced to 12%: Essar Ports

According to Rajiv Agarwal, CEO and Managing Director, Essar Ports, “Our Prime Minister’s vision of making India – A Global Manufacturing Hub and becoming US$ 5 trillion economy, will be one of the key objectives of the upcoming budget. Ports will play a pivotal role in achieving this objective and the budget should also focus on increasing the contribution of Ports sector to the country’s GDP. Ports is a significant driver of EXIM trade hence it becomes necessary to keep logistics cost low to encourage exports. Indirect taxes on port services has increased to 18% GST as industries like Thermal Power Plants, Fertilizer and Refineries are needed to pay higher logistics and manufacturing cost (on account of no GST Credit) for their raw material movement like Coal, LNG and Crude Oil, POL etc. This is impacting the competitiveness of sea transport as an option as compared to rail and roads that are less environment friendly modes of transport. Hence, GST for sea transport should be reduced to 12% for more sustainable benefits.”

Presently, PPP Projects and Major Port Trusts compete for cargo at Ports, which leads to conflict of interest. It is important that Major Ports should act as enablers with PPP projects driving the growth. To further strengthen the current position of the industry players, it is critical for ports to be given enough autonomy and decision making power to stay ahead in terms of modernisation and technological enhancements.Mechanized berths, sufficient stockyard and multimodal evacuation systems for fast turnaround of vessels are key enablers for productivity and efficiency of Ports & Terminals. To achieve this, investments will be required in dredging, developing adequate civil infrastructure and securing land along with latest technology equipment to create a mechanized and environment friendly cargo handling.

”The budget should also focus on development of Port bases industries and manufacturing hub. Taking clue from the success of Singapore, Dubai, Antwerp, Rotterdam and Houston for blue economy with all round development, we believe Hazira (Gujarat) and Paradip/ Mahanadi (Orissa) are two such locations which can be identified as frontrunner for Port based Industrial City prototypes in India. Innovative proposals for large scale development by private players must be awarded on high priority to boost the growth of sector.

In times of such uncertainties like the pandemic, “Aatmanirbhar Bharat” or a self-reliant India, is indeed a well thought out roadmap to encourage people to be ‘vocal for local’ for a future-ready India,” he adds.