(Published in Part – III Section 4 of the Gazette of India, Extraordinary)
| No. 3 | New Delhi, the 3rd January 2001 |
Tariff
Authority for Major Ports
NOTIFICATION
In exercise of the powers conferred by Sections 48, 49 and 50 of
the Major Port Trusts Act, 1963 (38 of 1963), the Tariff Authority
for Major Ports hereby clarifies the issues relating to re-conversion of US
dollar denominated tariff into Indian Rupee at the time of billing by the Major
Port Trusts as in the Order appended hereto.
( S. Sathyam )
Chairman
This case relates to some issues about re-conversion of US dollar
denominated tariffs to Indian rupees at the time of billing by the Ports.
This Authority has noted that no uniform
practice is being followed by the Ports with regard to the rate of exchange to
be applied for the purpose. Port users / representative bodies of port
users have been suggesting to link the exchange rate with the ‘Customs
Rate’, as it is a well established system.
2. The Ministry of Shipping (MOS) has also raised this issue for our consideration in the context of an audit observation relating to levy of vessel-related charges by the Visakhapatnam Port Trust. In the case referred by the MOS, the berth hire charges in respect of a floating crane that berthed in August 1996 and remained in the port for over 3 years was continued to be collected by the VPT at the exchange rate prevailing on the day of arrival of the floating crane. This was because of a stipulation in the earlier Government instruction that the exchange rate prevailing on the date of arrival of vessel should be considered. The Ministry of Shipping has suggested that all Major Ports may be advised to collect berth hire charges as per the exchange rate prevailing on a day-to-day basis.
3.
All the Major Port Trusts have been consulted to ascertain their views on
adoption of the Customs Rate of exchange or RBI daily rates and applying the
appropriate exchange rate at the time of incidence of charges instead of the
existing practice of going by the exchange rate prevailing on the date of
arrival of the vessel. The
Ministry of Finance has also been consulted about any difficulties faced in
operation of the Customs Rate of
exchange.
4.
The Central Board of Excise and Customs (CBEC) has intimated that it has
not faced any difficulty in the operation of Customs notified rates of exchange.
It has also informed that the powers to notify these rates have been laid
down in Section 14 of the Customs Act and these provisions are also consistent
with the World Trade Organisation (WTO) Agreements on Customs Value.
5.
All the Major Ports have furnished their comments on the issues referred
to them. Comments received from the Port Trusts reveal that a majority
of Port Trusts prefer to continue with the prevailing system of using the RBI
rates on the date of arrival of the vessel.
6.
With reference to the totality of information collected during the
processing of this case, the following points have emerged:
(i). The CBEC does not face
any difficulty in the operation of the Customs notified rates of exchange.
This indicates that there is no legal hassle in the adoption of the
Customs Rate as apprehended in some quarters.
(ii). There is no uniform
practice followed at the major ports with regard to the rate of exchange to be
applied. The users want a uniform approach.
(iii).
The MBPT, COPT, VPT,
and TPT are in favour of adopting the Custom Rate for conversion of the US
dollar denominated tariffs. However,
the KPT, JNPT, MOPT, PPT, NMPT and CPT prefer to use
the RBI daily exchange rate, while the CHPT prefers to use the SBI rate. The reason given for using the RBI rate by these ports is
that they have not faced any difficulties in this system and it is functioning
smoothly. All these ports
have opined that there is no need to change a system that has been operating
smoothly for quite some time.
(iv). All the Ports except the JNPT are
of the opinion that the exchange rate prevailing on the date of arrival of the
vessel may be taken for application for conversion of the US dollar denominated
port tariff. These ports
have pointed out some of the practical problems of adopting the exchange rate
prevailing at the time of incidence of service.
Pilotage charges collected are for both inward and outward movement,
which take place at two different points of time; but, the tariff
is a consolidated charge. Likewise,
billing of berth hire on 8 hourly basis may pose problems if different exchange
rates at the incidence of service are to be applied.
The JNPT has suggested an appropriate exchange rate at the time of
incidence subject to the following:
(a) Exchange
rate as prevailing on the date of departure of the vessel may be reckoned for
all vessel related charges.
(b) Exchange
rate as on the date of delivery for import containers.
(c) Exchange
rate as on the date of shipment for export containers
(v). The existing system of
billing based on the exchange rate prevailing on the date of arrival of the
vessel can not be allowed to continue in the light of the VPT case brought out
by the Ministry of Shipping. The
exchange rate requires periodic review in the cases of ships staying in a port
for a longer period. Such a
review, if made once in 30 days from the date of arrival of ships,
appears to be reasonable. It
is noteworthy that the Customs Rate of exchange is also generally revised once
in a calendar month.
7.
In the result and for the reasons given above, and based on a
collective application of mind, this Authority hereby decides as follows:
(i).
Bearing in mind the suggestions of the Ports, the existing
practice of applying the RBI daily rate shall continue for the purpose of
conversion to Indian rupees of dollar denominated tariffs at the time of billing.
(ii).
Considering the practical problems of adopting the exchange rates at the
time of incidence of service, the existing system of billing based on the
exchange rate prevailing on the date of arrival of the vessel is allowed to be
continued.
(iii).
A regular review of the exchange rate shall be made once in thirty days
from the date of arrival of the vessel in cases of vessels staying in the port
for more than thirty days. In
such cases, the basis of billing shall change prospectively with
reference to the appropriate exchange rate prevailing at the time of the review.
8. All the Major Port Trusts are hereby directed to introduce appropriate changes in their Scale of Rates accordingly.
( S. Sathyam )
Chairman