Asia/Pacific News
New Tax Prompts Big Slump in India Bunker Sales
Bunker sales in India have fallen by as much as 90 percent since a new tax in the country was introduced in July, according to local media reports.
As Ship & bunker previously reported, the rollout of the country's new Goods and Service Tax (GST) took effect from July 1, 2017 and was largely intended to replace several regional taxes imposed at central and state government level.
However, it also meant the introduction of an 18 percent tax on bonded bunkers from this date, compared to a rate of 0 to 4 percent previously.
Local sources have told Ship & Bunker that hectic discussions are ongoing between the National Oil marketing companies of India, private players, and the GST Governing Council in an effort to reduce the new tax, but any outcome from those talks is not expected for at least another month.
In the meantime, bunker sales in the country are reported to have taken a steep decline as a result of the extra cost.
"Bunker sales have dropped by as much as 90% with the introduction of GST," an industry official was quoted by The Hindu Business Line as saying.
"Sales are happening only on account of emergency situations where ships are stuck due to wrong calculations on bunker requirements."
According to the report, since July sales in Mumbai have fallen from as much as 10,000 tonnes per month to as low as 500 tonnes per month, while in Kochi monthly volumes are as low as 3,000 tonnes per month compared to as much as 30,000 tonnes per month previously.
One supplier was even quoted as saying the new tax had reduced their bunker sales to zero.
