The Hindu Business Line : Kochi bunkering terminal may be delayed further

The bunkering terminal project of the Cochin Port Trust is likely to be delayed further following the refusal of the Kerala Government to grant sales tax exemption for the activities proposed to be provided at the terminal.

It may be recalled that the port management had approached the State Government twice in the matter of ST/VAT exemption for the bunker supply to foreign-bound vessels.

However, sanction has been denied by the authorities on the ground that the sale of bunker could not qualify the requirement of an export sale under Section 5 of the Central Sales Tax Act.

Mr Paul Antony, Commissioner of Commercial Taxes of the Kerala Government, told Business Line that as per the rules, any sales to foreign going vessels could be treated as local and, hence, liable to be taxed.

He said that the Union Government was very particular about levying taxes on all transactions following the introduction of VAT.

However, he pointed out that the Government has taken up the matter with the Centre as well as the Empowered Committee of State Finance Ministers to consider sales tax exemption to the bunkering terminal on lines similar to that of aviation turbine fuel (ATF).

Senior port officials said the Rs 195-crore project, proposed to be set up at Puthuvypeen, would be attractive only if the State Government gives certain concessions.

As many as 8 bidders have submitted application for pre-qualification and the activities proposed under the project included bunkering, lube oil supply, de-slopping, garbage collection, fresh water supply, ship repair, crew change, storage facilities etc.