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Tuesday, 20 November, 2018, 11 : 13 AM [IST]

inCLA calls on PMO for exemption on customs duty for passenger ships

Proposes formulating a dedicated Policy for Cruise Tourism in India
Peeved by the recent circular of the Central Board of Indirect Taxes & Customs (CBIC) imposing customs duty on host of provisions for a cruise ship calling on Indian ports, a delegation of the recently-formed India Cruise Lines Association (inCLA) met the Prime Minister’s Office (PMO) seeking immediate intervention in the matter in the larger interest of the cruise tourism industry in the country. The CBIC circular dated October 4, 2018, has imposed customs duty on a host of items from the cruise ships’ ‘stores’ and ‘provisions’, including alcohol.

In their meeting with Debashree Mukherjee, Joint Secretary at the PMO, the inCLA delegation pointed out that additional duties and taxes will act as a deterrent and discourage international cruise companies from coming into India. Moreover, they expressed the view that India needs to follow global practices, if it intends to have a thriving ‘cruise-tourism’ sector, since nowhere in the world, ship provisions and stores are subject to ‘customs duty’ on berthing.

The four-member inCLA delegation included Jurgen Bailom (Chairman), Ratna Chadha (President), Nalini Gupta and Rajeeb Mallick (Vice Chairmen – Ministry & State Affairs). Along with the letter seeking the PMO’s attention, the delegation also submitted to the PMO the White Paper that was presented to the Union Shipping Minister, Nitin Gadkari at inCLA’s Global Cruise Conclave in Mumbai on August 30.

The letter submitted by inCLA reads, “Multiple ministries of the Federal Government and also the state(s) governments has a bearing on this subject and also has significant interests, i.e. Department of Shipping, Ministry of Tourism and Department of Commerce as also the Ministry of Finance and State GST Departments & Others. This issue will be best addressed if a ‘nodal ministry’ is identified for the subject and to assess all the issues and concerns that each ministry might have on this topic, so that cruise tourism sector does not suffer because of any lack of co-ordination and different priorities of the departments, and the proposed action plan is completed in a time-bound manner.” While seeking exemption from the customs duty, inCLA has proposed a dedicated Policy for Cruise Tourism in India so that different departments of the government think and act with the same objective. Moreover, they requested for adopting global policies of the key cruise markets to maintain uniformity and make India competitive for the cruise business.

Talking about the meeting, Gupta said, “We met Debashree Mukherjee, Joint Secretary at the PMO on November 8, 2018. She was very positive and promptly comprehended the issue. She agreed we need a clear Cruise Tourism Policy for India. She said she will ask the Tourism Ministry to work on a Cruise Policy in conjunction with the Ministries of Finance and Shipping, and inCLA. This will need to be thereafter approved by the Cabinet, which could take 3 months.”

Bailom stressed on the potential of cruise tourism as a real game-changer for Indian tourism. “The global cruising industry is one of the fastest growing segments in the travel & tourism industry, and can make a significant contribution to a destination’s economy and local communities. As cruise lines are looking for new destinations, India is fast emerging as a potential destination for the cruise tourism. Especially for the coastal states, considering the vast coastline the country is endowed with, and yet remains un-exploited. It is also a potentially large employment generator besides being a significant source of foreign exchange for the country. That, provided a friendly regulatory frame-work is in place.”

Narrating his three decades of global experience in the sector, Bailom stated how countries have progressed and gave the example of China, which has grown many folds in just a few years of commencing operations. “India can certainly learn from those success stories,” he believes.

As per inCLA, the cruise tourism sector has the potential to generate revenue of INR 35,500 crore by 2022 and create 2.5 lakh jobs. Additionally, with India coming on the cruising map of the world, the country will be able to showcase its culture, places of historic importance and serene landscape to large number of foreign tourists, who prefer the convenience of sea cruises to further add to their visit India experience.
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