Chittagong shippers who use the port during the holidays will get a 5 percent cut in port charges, a welcome relief shippers say, eight months after introduction of the value added tax (VAT) on all 60 port services offered.
The Ministry of Shipping has already approved the proposal, forwarded by the Chittagong Port Authority (CPA) last week. Officials’ goal is to keep the prime seaport busy 24/7.
The next step is for the CPA to issue a notification regarding the new policy.
Currently, shippers pay about 10,000 Bangladeshi taka ($117) in port dues for an imported or exported container. A 5 percent cut in port dues will reduce that cost by 500 taka per TEU.
Businesses applauded the decision, terming it a “superb step” that will help the port achieve its goal of maximum use around the clock.
“The 5 percent cut in port charges will attract shippers to use the port during the holidays. The amount is not small one,” Chittagong Metropolitan Chamber of Commerce and Industry Vice President M A Mahabub Chowdhury told the JOC.com.
Chowdhury said the incentive will help minimize the cost of doing business significantly and the port’s productivity will also increase.
Container back-up during holidays
Typically, during weekly holidays and other government holidays, including the festival-linked holidays, shippers show reluctance to take delivery of containers, and that leads to a stockpile of containers in the port yard.
In late June, after a week-long Eid holiday, about 42,000 TEU containers accumulated and were stockpiled in the port yard, as shippers did not take delivery of containers, amid the closure of factories.
What’s more, inland container depots also saw containers accumulate, as shippers were reluctant to take delivery of boxes, citing the lack of trucks and lack of security on highways.
Exporters Association of Bangladesh vice president Mohammad Hatem told JOC.com providing incentives can attract shippers to use the port around the clock.
“The 5 percent cost cut will help make the 24/7 services attractive,” Hatem said.
In January, Bangladesh’s revenue board expanded the VAT to all 60 services provided by Chittagong port to shippers. Prior to the decision, a 15 percent VAT was collected on only 25 types of services.