The Hindu Business Line : Free market play to determine CHA charges irks shippers

THE Northern India Shippers' Association (NISA) is irked by the Finance Ministry's move to allow market forces to determine the fees chargeable by customs house agents (CHAs) from their clients.

NISA has called for a total reassessment of the policy and suggested wider discussion before arriving at a policy decision in this regard.

The Finance Ministry on Tuesday announced significant changes to the CHA regulations, after a span of 20 years. Besides allowing market forces to determine the fees charged by CHAs, the revenue department has also extended the period of validity of a CHA licence to 10 years.

In a statement issued on Wednesday, the NISA said that the Government's decision to withdraw from the task of fixing the charges would result in an "unhindered increase" in fees levied by CHAs, thereby adding to the transaction cost and making exports uncompetitive.

NISA said that almost 90 per cent of the trade is being carried out through "nominated" CHAs with little scope for market forces to play.

With CHAs being nominated by the buyers, exporters have no choice but to use their services. Complete withdrawal of the Government from the task of fixing CHA charges might lead to total anarchy with shippers being left at the mercy of the CHAs, the statement said.