Demand supply scenario, regulatory challenges export and import industry faces and infrastructure solutions shipping companies can offer, were brought to the fore
At the beginning of the conference, Ramprasad, Editor-in-Chief and Publisher, Maritime Gateway gave an overview on the liquid cargo vertical. The ever-growing demand for energy needs a lot of infrastructure. The stakeholders need to take cognizance of changing oil movements and the need for moving LNG and other petroleum products into the country on massive scale make it inevitable to create dedicated and customized infrastructure facilities for liquid cargo.
Jaffrey Thomas, Director at PricewaterhouseCoopers (PwC)
India detailed on the demand-supply scenario in liquid cargo. LNG has a share of 7 per cent in energy consumption and spans across various industries. The overall realistic demand for LNG is close to 500 MMC & SCME. This indicates a lot of latent demand already setting in the market. This can be converted by adding pipeline infrastructure and logistics capacities. India has become the fastest growing market for POL consumption in Asia. HSG, porter spirit and NAFTA together come for approximately 55 per cent and a little more than half of the POL consumption and this trend is expected to continue further, Jeffrey added. There’s a positive demand in LPG space, and the consumption is expected to reach 36 mmt by FY 2028 from the demand of 22 mmts in FY 2017. LPG imports have grown to 9 mmt from 3 mmt over a period of five years, he elaborated.
Jayyannt L. Lapsiaa, President, All India Liquid Bulk Importers and Exporters Association (AILBIEA) highlighted the challenges importers and exporters are facing in handling the growing volumes of liquid bulk cargo. The contribution of the liquid bulk to the port revenue is about 58 per cent and in case of major ports such as Mumbai, Chennai, Kandla, Kolkata, and Visakhapatnam the revenue can go up to even 75 per cent. But still, government and shipping companies are neglecting the easiest to handle liquid cargo without laying proper procedures. AILBIEA has been talking to the government and requesting for a holistic department for handling the liquid bulk and for dedicated ministry for the Exim trade.
Anil Yendluri, Director and CEO, Krishnapatnam Port Company Limited informed about the developments at his port for the liquid bulk cargo handling. Krishnapatnam has become the second largest edible oil port with the handling capacity of more than two million tonnes after Kandla. To handle the growing volumes, KPCL has demarcated enough land wherein more than 4 jetties, berths for cargoes, and dedicated pipeline corridors can be built.
“Through such deliberations trade bodies can get to know what the government is doing for the industry and government also understands the requirements of the trade and the challenges of stakeholders,” shared SK Rahman, IRS, Commissioner – Directorate General of Goods and Service Tax, Dept. of Revenue, Ministry of Finance. He detailed on the government’s initiatives for the players in liquid cargo sector focusing on GST related issues.
GST has brought 95 per cent of supplier goods below 18 per cent tax bracket. In GST, the tariff rates on bulk liquid cargo are very less. Tax returns filing has also been simplified. Earlier, exporters and importers used to file GST1, GST2, and GST3 returns separately, but now they need to file only GST3(b) and GST1.
Taxes on liquid cargo are fairly simple; however, the complications related to the procedures may be there, clarified C.P. Rao, Chief Commissioner GST, and Central Excise, Tamil Nadu and Pondicherry region. POL is the major chunk of the liquid cargo, which is not in the purview of the GST system. States get more tax percentage on petroleum products than the centre, so they don’t want to lose their hold on them. However, the consensus is building up and once it’s brought into the GST system, businesses in shipping, exporters, and importers will have a number of benefits.
