Tax Rule Could "Change the Dynamics of Bunkering" on India's Eastern Coast

by Ship & Bunker News Team
Monday February 1, 2016

Adani Bunkering Pte. Ltd. (Adani Bunkering) has welcomed a move by the state of Andhra Pradesh in India to drop the Value Added Tax (VAT) rate for all coastal and foreign going vessels to 0.5 percent from an earlier rate of 14.5 percent.

"A much awaited Amendment for reduction of VAT rate in bunker supplies made at Andhra Pradesh Ports has finally came into effect, and I believe this would change the dynamics of bunkering business in Eastern Coast of India," Rajesh Mohata, COO of Adani Bunkering.

Adani Bunkering says that the updated tax policy will "release the choke point" in the bunkering business at the Port of Vishakhapatnam, Andhra Pradesh's largest port and India's second largest government port in terms of cargo volumes.

News of the new tax reduction is said to have prompted Adani Bunkering to make plans to become a physical bunker supplier in Vishakhapatnam's port, where its principal company Adani Group already has a jetty.

"After this change Adani bunkering sees a significant increase in bunkering volumes at Andhra Pradesh Ports," said Mohata.

"High vessel calling, strategic location and growth rate of ports will create a good market for shipping industry including bunkering."

Last week, Ship & Bunker reported that Nitin Gadkari, Minister of Union Shipping, Road Transport and Highways has requested that the Government of Indian state Odisha grant a VAT exception on bunker fuel used by Indian flagged vessels operating along the coast and inland waterways.