Marine Lines October, 2018

Let's turn the tides

Volume:I Issue:III October 2018

Price: 150

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MARITIME CLUSTER: WHY INDIA NEEDS ONE ?

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MARINELINES Editor-In-Chief Girish Joshi Managing Editor Jaimini Rao Associate Editor Naishidhi Anjariya

From the Editor's Deck

National News Cordinator Abhijit Mukhopadhyay Design & Layout Pravin Kacha Manager (Marketing) Babu Patel Head Office Marine Lines 3. 2nd Floor, Plot No. 283 Madhuban Tower, 12/B Gandhidham, Kutch, 370201, Gujarat, India email: marinelines2018@gmail.com +91 99095 55416 Mumbai Office 14, Ground Floor, Himalaya House, 79 Palton Road Fort, Mumbai 400001 Contact : +91 98200 03562

To share news / views etc: editor@marinelines.net To share press releases : news@marinelines.net For advertisement : advt@marinelines.net For subscription : subscription@marinelines.net For general enquiry: info@marinelines.net

Published by Girish Joshi and printed by Print Vision Pvt. Ltd. on behalf of Girish Joshi. Printed at Print Vision House, Lane Opp to Ashwamegh Elegance 2, Ambawadi Market, Ahmedabad 380 006, Gujarat. Published from # 3. 2nd Floor, Plot No. 283 Madhuban Tower, 12/B Gandhidham, Kutch - 370201, Gujarat, India. Editor: Girish Joshi.

Dear Readers,

G

ujarat has remained a maritime gateway for India, thanks to maximum number of private ports along with the minor ports which handle nearly 83% of the cargo handled by all minor ports of the country.

But time has come to embark on a new voyage. Maritime Cluster planned by the Gujarat Maritime Board (GMB) will go a long way in establishing Gujarat has the ultimate hub of maritime industry. The cluster will house maritime-related service providers such as ship owners, shipping agents, ship chandlers, and shipping finance and insurance firms and maritime education institutes.

Such soft infrastructure at a single place in GIFT City will be a onestop solution for all maritime related activity. Such clusters have propelled the maritime development in Dubai, Singapore and many other countries.

In this issue, we focus on development of this cluster and its advantages.

Marine Lines also undertook an investigation at the recently installed container scanners at Mundra port. We found how the nexus between scanner operating firm and the container freight stations is causing immense suffering to the importer who are forced to shell out huge money to get their cargo cleared or ensuring that their container is not marked ‘doubtful.’ The scanners were installed to ensure security and curb smuggling. But the facility has become a tool for many to make quick money.

Also, it gives me an immense pleasure to announce that we have launched our website www.marinelines.net. We will soon be updating the same with more information.

Please do keep writing to us with your feedbacks and suggestions.

Girish Joshi Editor-In-Chief

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Inside 06

Cover Story:

Gujarat Maritime Cluster coming up in the GIFT City to provide one-stop solution for all maritime activities

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Travelogue:

Unscathed by tourist rush, virgin beaches of Dwarka provide a perfect getaway from fast-paced urban life

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Marine Lines Investigation

Dirty nexus between CFS & container scanner operators at Mundra port

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Expert Speak: All you want to know about the mandatory e-way bill

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Q & A:

Mukesh Kumar, IAS, vice chairman & CEO, Gujarat Maritime Board

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OCTOBER 2018 • MARINE LINES

GST woes

18% GST on shipping services denying India precious foreign exchange

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Health:

Diabetes can be fully reversed

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Cover Story

HARDSELLING THE HUB OF SOFT INFRASTRUCTURE

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he concept of maritime cluster though new to India, is prevalent and well-accepted globally and forms an important component of many governments’ policies in economies like UK, Singapore, Australia, USA etc. A maritime cluster can be broadly defined as a group or agglomeration of firms, institutions, business and other industry players in the maritime sector that are geographically located close to each other and thereby enjoy positive synergy between their activities. The cluster approach concerns “interconnected companies, specialized suppliers, service providers, and firms in related industries”.

Maritime clusters have evolved organically in the industrial countries of Europe in early 19th century like The Baltic Exchange of London. Over a period of time 6

and nurtured Dubai Multi Commodity Exchange (DMCC) within the Jumeirah Lakes Towers (JLT), which is a cluster inorganically created by direct intervention and investment by the government, leveraging on its relatively better infrastructure and tax free environment.

Maritime Clusters are the driving forces of some of the most competitive ports of world like Rotterdam, Singapore, Hong Kong, Oslo, Shanghai, London etc. Besides being highly productive, maritime clusters have evolved as a cradle of innovation in these economies.

The concept of maritime cluster is seaport-agnostic, as proven by thriving maritime clusters in land locked countries other clusters grew semi-organically, the like Switzerland, Luxembourg and some best examples being Singapore and Swit- European countries. A brief study of the zerland. Centres like Dubai have built leading maritime capitals of the world re-

Maritime Clusters are the driving forces of some of the most competitive ports of world like Rotterdam, Singapore, Hong Kong, Oslo, Shanghai, London etc

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veal that each one of them has a thriving cluster, supported ably by the Government with conducive tax regime and robust infrastructure.

The total economic impact of maritime activities in a cluster in terms of direct economic activity and jobs created and indirect effects on the induced job and demand creation across the value chain have profound impact on the regional economy. This has led to the realization that the full economic significance of maritime activities is not the jobs at sea, but rather the derived employment and economic activities on shore. Though maritime activities may be at national or international level, the value they create is retained domestically to a large extent to benefit their hosts.

In India, when the term maritime hub from traditional approach to Modern apis referred to, the only city that garners at- proach which is only possible by changing tention is possibly Mumbai. Mumbai has the current mind-set and looking beyond in fact been quick to leverage upon the the obvious. The cluster approach was an opportunities that were derived out of port integral part of the Ministry of Shipping’s and port led development and over a peri- landmark Sagarmala Programme, a USD od of time, has witnessed development of a 120 Billion initiative designed to usher in cluster of industries-organizations-entities a transformational change in India’s marcomprising of ancillary and auxiliary orga- itime sector.

Service-based maritime cluster in nizations related to ports and shipping.

Even then, maritime services industry Gujarat to come up in GIFT City Endowed with country’s longest coastin India, is extremely disjoint, limited in scale and specialization and lacks global line of 1600 km, Gujarat is the nearest recognition and brand. The country is a net maritime outlet to Middle East, Africa and importer of maritime services from firms Europe. By virtue of its strategic location, based out of Colombo, Singapore, Dubai, proactive policies and initiatives as well as Hong Kong and others, resulting in net di- robust industrial and support infrastructure, rect loss to the economy. Moreover, many the state has emerged as flag bearer of InIndian firms have either relocated or set up dia’s maritime success story and acts as the operations in foreign clusters owing to lack gateway to the north-west hinterland and of sector focus, tax /incentives and clus- major states of India.

Gujarat is home to many “firsts of its tered approach in the country. kind” landmark developments in the ports Hence, a “Clusand infrastructure sector in the country ter Approach” including the first private port, first LNG is needed chemical port terminal and also houses in dethe highest number of operational velopnon-major ports and commerment cial cargo ports in the country of a and the world’s largest ship recycling yard.

Despite the fact that Gujarat handles far more cargo throughput than any other state in India, there is no distinct town or city in Gujarat with a strong maritime identity.

In other words, it can be said that Gujarat does not have the soft infrastructure like ship finance, char-

competitive maritime service base in India. Moreover it is the need of the hour to make a paradigm shift

tering, ship brokering etc. in place to complement the hard infrastructure that Gujarat Maritime Board (GMB) has created for facilitation of the trade.

To address these concerns, a first of its kind initiative in India, a services based maritime cluster project was conceptu-

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The proposed maritime university in vinational financial institutions. The cluster is proposed to be developed in GIFT City, cinity to the cluster will address the induswhich is India’s first Operational Green- try ready manpower requirements of the field Smart City and only International Fi- sector and will pave way for industry-academia collaboration for research and denancial Service Centre (IFSC).

GIFT city, which has been ranked velopment.

Vision and Way Forward amongst Top 3 Emerging Business Hubs The vision of GMC is to develop into in the world and is equipped with state-ofa cluster of international repute, providing one-stop solution for all maritime services while attaining economic growth, employment generation and industry-academia confluence in the region.

The objective of the cluster would be to provide world class infrastructure to its members, along with assisting the members in professional conduct to market the cluster as a center for excellence. It is envisaged that the cluster would have globally competitive tax structure, opportunities for professional development through seminars and conferences with global shipping entities and world class office inthe-art infrastructure with India’s first un- frastructure. The cluster is also expected to derground utility tunnel, Gujarat’s first pre- provide a fillip for business opportunities mier business club, robust IT infrastructure, to members, with presence of asset owners and service providers. district cooling system amongst others The cluster is expected to help accrue significant benefits to the playGiven the level of existing commercial maritime activity and its’ expected pace ers in terms of transfer of technical of future growth in India and Gujarat in particular, the maritime know-how amongst the participants, cluster will greatly facilitate and enhance them by acting as a hub possibility of joint marketing endeavfor talent, expertise, finance and innovation, providing much needed ours, better lobbying and bargaining eco system for companies to grow and flourish, which would in turn power, improved perception of credimmensely help the local and national economies and establish the ibility in the market derived from a cluster as a maritime hub of preference.

Amit Oza strong cluster brand, attraction and Director, retention of talent and facilitation Astramar Shipping Ltd, uae of better networking and interaction amongst others.

alized by GPIDCL, a 100% subsidiary of Gujarat Maritime Board (GMB) in line with the vision of the Hon’ble Prime Minister Shri Narendra Modi to focus on maritime services and create an integrated ecosystem for ports and maritime sector players in the state.

Akin to most prolific maritime clusters globally, a Top-down approach (High Intervention approach) shall be adopted to develop the cluster in its nascent phase of development in form of facilitation of a conducive business environment for the prospective participants. Gujarat Maritime Cluster (GMC) is envisioned to be developed in a Four Project Delivery Phases spanning 15 years and is expected to foster an integrated ecosystem for maritime sector in a single location through presence of players including Regulators; Industry/ Trade Associations; Shipping Industry players; Intermediate service providers; and Support service providers.

As the cluster will be focused on the maritime services, it is envisaged that the Cluster would need sophisticated urban infrastructure along with international/

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marine lines investigation

SCANNING THE SCANNERS

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n an investigative trail conducted by Marine Lines, titled “SCANNING THE SCANNERS”, shocking revelations of how approximately 10 million Rs one crore) rupees a day is coughed out from exporters and importers, just by rejecting the container while it is being scanned at India’s biggest private port on the coastline of Gujarat.

It is learnt from several sources within the regulatory agencies, industry, warehouse owners & operatorsthat the scanners installed at Adani Group’sMundra Port are becoming a huge tool of corruption for several private players who have rented or leased high-priced container freight stations within the vicinity of the port.

Vide the essentials and mandatory measures for making the Indian ports secure three high-speed container scanners investing Rs150 crore has been in-

stalled by government at Mundra Port.

As the port has in impeccable inbound and outbound connectivity via rail and road network for shipping and allied logistics movement, each contain-

Officials have confirmed to ML that scanners have become a huge tool of corruption for private players who have leased CFS within with port vicinity er is scanned in a timespan of 36 seconds.

MANPOWER OUTSOURCED The reader or operator who operates the container scanning system is neither the government nor has Adani Group to do anything with it.

Manpower to do the job of reader or operator for operating the container scanning system is outsourced by the customs department at Mundra Port.

AUTHORIZATION & PROCESS The concerned person operating the scanning system is authorized to declare the scanned containers with remarks of either “doubtful” or “needs verification”.

The container which is marked with remark 1 or 2 is held and not referred back to the party (in this case exporter or importer), of the party’s carrying handling agent (CHA).

Instead the container is shifted to one of 20 Container Freight Stations (CFS)

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within the vicinity of the port.

THE GAME This CFS within the vicinity of the port are wholly operated by the private players.

All the CFS within the vicinity of the port are either leased or rented premises given by Adani and its subsidiary companiesto the concerned private operators.

Once the containers are diverted to CFS, the shipment schedule gets delayed by atleast seven days.

The time-period of seven days is consumed due to de-stuffing, 100% inspection and then re-stuffing the container completely, making it ready for shipment once again.

The entire process puts an additional financial burden on the party (exporter or importer in this case) amounting to Rs35,000 To avoid the whole process or remarking the container while it is being scanned and to get “All OK” clearance, the agent pays bounty or token in advance ranging from Rs 8,000 to Rs10,000 per container. This is what highly placed sources within the regulatory bodies and industry have admitted to Marine Lines.

FACT CHECK As confirmed in interactions with several officials,Marine Lines learns of

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more than 90% of the containers which were remarked as “doubtful” or “verification needed” were having the same goods as declared in the shipping papers and were not found faulty.

On further digging and probing the matter, it is learnt that atleast four lakh containers are shipped on yearly basis Reverification of export containers does result in consigners missing the ship.

To overcome this hurdle, the customs department is seriously considering as to how the delay of containers marked checking/ verification can be taken care of so that there is no undue delay in dispatching the cargo Uday Shankar Rakhe, IRS Addl Commissioner, Customs, Kandla from Mundra port.

Per day movement of 1,100 containers is reported from Mundra port.

“As observed, there is a syndicate of these private container freight stations operators who have been hands in gloves with the operator or reader sitting on the scanner and whose job is outsourced,”

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admitted one senior official citing anonymity.

These syndicate of private container freight operators is milking the parties (exporters and importers in this case), he added. wwParties do not mind paying Rs10,000 per container to avoid the loss in terms of shipment schedule days and additional Rs 65,000 per container for de-stuffing and stuffing same, if rejected and ferried to the nearby CFS, he explains.

ACTION NEEDED Going by the container movement data from Mundra Port,Marine Lines learns of approximately Rs10 million worth corruption done on daily basis on average basis through such malpractice of rejecting containers by remarking it as “doubtful” or “verification needed”.

When ports in Kutch serve the 70% of the hinterland traffic from northern region, such operators using the government infrastructure to facilitate safe and smooth trade are indeed misusing it and are busy filling their coffers.

If appropriate measures are undertaken, concerned regulatory agencies decide to plot a trap, the entire nexus of such gullible operators milking exporters and importers would be very soon in public domain.

CHAs V/S CFS My importer had to cough up Rs 67,4142 after our container was assumed to have non-declared goods by the scanner operator. The container was sent to a CFS and fully destuffed. This caused a delay of 6-7 days besides incurring unwarranted costs like detention charges, shutout charges, ground rent, custom examination fees and additional seal charges. After all this, the goods were the same as per the invoice and nothing suspicious was found.

This happens in majority cases. What is the use of having modern technology when ultimately its going to be operated by vested interests?

Sanjay Gandhi, CEO Global Marine Agencies

CHAs seek PM’s intervention

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he EXIM community in Mundra is also at sea looking at the sheer number of containers that are marked as ‘doubtful’ or ‘mismatch,’ and said that the suspected malpractice is causing heavy losses running in crores daily.

The level of frustration among them can be gauged from the fact that Mundra Custom House Agents Association (MCHAA)had also written to the Prime Minister Narendra Modi bringing to his notice the alleged irregularities.

The subject of the letter itself spoke volumes of the trouble: It read: “Problems faced by EXIM community due to heavy charges collected by Container Freight Stations at Mundra Port and Money Laundering done to overseas shipping companies with the support of CFS. “After the implementation of container scanning division, the CFS authorities have started charging Rs 1.500 per TEU, i.e. Rs 3,000 per 40 TEU. Nowhere, in India scanning charges are collected by the CFS authortieis which are selected for scanning by the system as soon as the IGM is inwarded,” the association wrote.

CHAs pointed out that 80-90% containers are endorsed as mismatch, which is either due to lack of knowledge of the officer operating the system or a possible fault in the scanning machine itself. Well, the scanners are brand new and chances of malfunctioning look negilible, sources said.

“Destuffing and re-stuffing the container

costs Rs 10,000-Rs 15,000 to the importer,” MCHAA stated.

What’s more shocking, according to the CHAs is that none of the goods labelled as

‘mismatch’ by the scanner operator were found other than those declared.

MCHAA urged the PM to issue necessary instructions to customs department to rein in the container freight stations which are virtually having a free run.

“The negligence and incompetence of CFS is causing losses running into crores daily for the EXIM trade,” they said, demanding that CFS be brought under the Tariff Authority of

India.

MCHAA alleged that the CFS don’t even follow the Cargo Handling Rules 2009 and charge demurrage/detention charges for goods which are seized/detained by the customs authorities. There is no relaxation form the side of CFS or the shipping companies.

The nexus between the CFS and shipping companies is very strong and needs to be investigated by some central agency well-versed with this field.

The government of India is making several efforts to reduced the dwell time so that the additional burden on EXIM trade is not levied.

The disposal by customs authorities at Mundra port is done one the very same day. But the CFS operations are very weak. The concept of Ease of Doing Business was introduced to reduce the dwell time and save transaction cost of the importer so that it may be passed on to the public, but due to these additional costs levied, the importer is not able to do so.

Sometimes the en-block movement takes a week’s time, resulting in heavy detention/demurrage charges on the importer. As regards, the tariff is higher compared to other ports of India.

The bills of entry facilitated through RMS require only seal verification, but at Mundra port the containers are en-blocked to CFS only to gain additional benefits which is on a large scale transferred to overseas shipping companies in the form of money laundering..

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Piracy

Piracy at High Seas and the Seafarer

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iracy is synonymous with the sea for as long as humans have sailed the waters. Before the development of other modes of transportation, carriage and transport of goods by sea was considered to be the safest way, albeit time-consuming.

While one set of people were busy figuring out how to make money through sea transport, there was another bunch that saw an opportunity in this to earn easy money by hijacking or stealing from these merchant vessels. They were known as pirates and what they did was nowhere near as glorious as the movies would have you believe.

As merchant ships and shipping in general has evolved over the years, so have the pirates whose methods have changed with the advent of technology.

There are a number of articles available online and in print, which looks at how pi12

racy has affected global business and the ship-owners, this article looks at the other end of the spectrum, on how the piracy has affected the person in the firing line- the lonely seafarer. l 90% of world’s goods are transported by sea, according to profile on the IMO website l 70 % of this is transported as containerised cargo. l All this amounts to US$ 436.6 billion and 13.5 million jobs. l Cargo through liner shipping represents about two-thirds of the value of total global trade, equating each year to more than US$ 4 trillion worth of goods Between 2005 and 2012, piracy activities were rampant in the Horn of Africa and the East

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Africa coastal waters. Thereafter, piracy activities prospered in West Africa Gulf of Guinea States.

The biggest problem facing the seafarer in terms of security is the fact that merchant vessels are not allowed to carry weapons due to multitude of international regulations.

Since the piracy and hijacking attacks started in 2008, the IMO had designated an IRTC (Internationally Recognised Transit Corridor), which was a passage where naval vessels of different countries would lead convoys of merchant vessels as this was considered the most dangerous area for navigation. This is the route all vessel’s used during their transit through the Gulf of Aden, which was named as the High Risk Area (HRA) by the MSCHOA (Maritime Security Centre - Horn of Africa). This area from the Gulf of Suez, upto the South Coast of Sri Lanka on the east, the Gulf of

Oman on the north and the island of Madagascar on the south, is the busiest route for vessels of all types and before guards were employed, ship’s crew were like sitting ducks and apart from a few security measures mentioned in their Ship Security Plan, there was little else they could do.

The writer has personally transited this area more than 50 times over the past few years and in the beginning, around 2008 the ship’s staff was so scared of their lives after hearing reports of the treatment meted out to the people held for ransom, sometimes on the vessels in Somalia or in worst situations, in the desert under constant threat of the gun, that a fair few quit sailing for good and many more were dissuaded by their family members The family members of the seafarers were equally worried about their wards and since Internet was not widespread and very expensive onships then, communication was not as easy as it is today. As they say, it always gets worse before it gets better, there was a time around 2009, where ship’s staff became so paranoid, that every small craft looked like a pirate craft and even innocent fishermen, who were out to just catch fish to sustain their livelihood, were reported to the Navy as potential pirates. There were so many reports from the International Piracy Bureau in Kuala Lumpur regarding attacks and boarding, that it was all people talked about while working and during leisure periods.

A few unfortunate seafarers who were held for ransom in Somalia for different time periods, after they were released, were so traumatised that they required therapy and psychiatric evaluation before being found fit enough to sail again. The situation was only slightly better with the staff on the vessels which were never boarded, but stayed under the constant threat of attacks and hijacking.

One advantage, if you can call it, during the piracy attempts in Somalia was that nearly the entire northern part of Somalia was ungovernedor without a government.

The area was under control of various warlords, and as such, foreign nations could

100 out of 104 piracies in WA alone

According to statistics released by the International Maritime Bureau in their “Piracy and Armed Robbery Against Ships- Jan to June 2018” report, in the first six months of the year, there were a total of 104 incidents regarding violence against ship’s crew, out of which 100 incidents were reported in West Africa 3. deploy armed security onboard ships while transiting through the territorial waters (within 12 nautical miles) of this area.

After 2012 though, as more and more companies started employing Armed Security Guards, the threat of hijacking slowly receded and over the past year, there have been no reported incidents of attacks or attempted boarding of merchant vessels in the Gulf of Aden. Nowadays, armed guards are still provided on nearly all vessels during the passage through this area, but the threat is omnipresent.

Threat has shifted to Gulf of Guinea The threat of piracy has now shifted from the Gulf of Aden to the Gulf of Guinea, which includes the countries in the Western part of Africa like Benin, Cameroon and Nigeria.

The biggest problem ship-owners and ship staff face while transiting in this area is that the pirates who operate here are not interested in ransom, which was the case in Somalia. They are more interested in the theft of precious cargo and bunker fuel which is loaded on these vessels.

Since the various countries in this area have their own jurisdiction where their laws are applicable, the pirates are forced to operate outside their boundaries and as such have limited opportunities of holding ship’s staff and vessels for ransom.

This has proven more dangerous for the ship staffas any resistance against these pirates is dealt with severe violence and there have been numerous

reports where ship staff has been shot, sometimes fatally, when trying to resist boarding attempts by these pirates.

Armed guards no solace for sea farers When the ships are operating in West Africa, due to the existing laws of the states, armed guards or third party security companies are not authorised to operate in the territorial waters, they are only permitted to carry unarmed guards.

From prior experience, the writer has observed while carrying out operations in Benin, Togo, Ivory Coast or Nigeria, carrying the local naval personnel during the vessel’s stay is mandatory.

Only the naval personnel are allowed to carry weapons on board.

This does nothing to alleviate the stress caused to the seafarer. Although there is no concrete evidence, there have been reports that some of the naval personnel are in cahoots with these pirates, as they get a portion of the money retrieved from sale of cargo. So the ship’s staff is under even more pressure to monitor the naval personnel who stay on board as well, alongwith the threat from pirates coming in from the sea.

As awareness level in people has increased, fewer people joining sea from the developed countries. But, in the developing countries such as ours, the prospect of earning in dollars is much more important than the threat to lifewhile working in these areas.

What happens to the lonely seafarer now?

There has to be some sort of apparatus or system to ensure ship staff is counselled before joining seabecause it is not all about physical work. The Human Element is a major factor nowadays in the optimum running of vessels and the sooner ship-owners identify that this as a major factor in ensuring they always turn a profit, the better the conditions will be for the seaman.

Capt Shehwaz Riyaz Marine Superintendent, Celestial Meridian Shipping, E-mail: shehwazriyaz@outlook.com (Views Expressed Are Personal)

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expert speak

E-WAY BILL MUST IN GUJARAT: ALL THAT YOU NEED TO KNOW

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lectronic Way Bill or popularly known as E-Way Bill is an electronic intimation which is required for movement of goods.

It can be generated on the e-Way bill portal. Transport of goods of more than Rs.50,000 (single invoice / bill / delivery challan) in value in a vehicle cannot be made by a registered person without an e-way bill. For all inter-state movement of goods e-way bill is required. To plug loopholes and leakage of revenue, the government is promoting rolling out e-way bill across various states.

As far as Gujarat is concerned, E-way bill was made mandatory from April 15, 2018 for intra-state movement too. However, it was applicable in respect of only 19 specialized Items. Now, with effect from October 1, 2018, the e-way bill is required for every commodity if the value exceeds Rs 50,000. The old notification No. GSL/GST/RULE-138(14)/B.12 dated April 11, 2018 has been superseded by No. GSL/GST/RULE-138(14)/B.19 dated April 19, 2018.

One relaxation is that e-way bill is not required for movement within Gujarat state if the same is done for the pur14

pose of job-work of hank, yarn, fabric and garments for within the inter-state movement. Intra-city i.e. within same city or the same village, movement of goods is granted exemption for the purpose of e-way bill. It should be kept in mind that even when e-way bill is not required, the other relevant document like invoice/ bill / delivery challan should be accompanying the goods.

It is responsibility of the transporter that during the course of transportation shall carry — the invoice or bill of supply or delivery challan, as the case may be; and a copy of the e-way bill or the e-way bill number, The commissioner may authorize any officer to intercept any conveyance to verify the e-way bill or the e-way bill number in physical form for all inter-state and intra-state movement of goods. Section 129 of the CGST Act provides for detention and seizure of goods and conveyances and their release on the payment of requisite tax and 100% penalty in cases where such goods are transported in contravention of the provisions of the CGST Act or the rules made thereunder. Thus, if goods are

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Monish Bhalla Author and GST expert sent without e-way bill the goods can be seized and tax plus penalty equivalent to goods become leviable. The flying squads / intercepting officers are initiating proceedings under section 129 of the CGST Act for every mistake in the documents.

Thus, it is important that all movement of goods should be done with proper documentation to avoid any difficulties during the course of transit.

The government has reduced the penalty to Rs.1,000/- (500 CGST + 500 SGST) in cases where there are minor mistakes.

The recent circular No. 64/38/2018-GST dated September 14, 2018 have enumerated the list of mistakes where reduced penalty should be levied. The circular states that in case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, proceedings under section 129 of the CGST Act may not be initiated, inter alia, in the following situations: a) Spelling mistakes in the name of the consignor or the consignee but the GSTIN, wherever applicable, is correct; b) Error in the pin-code but the address of the consignor and the consignee mentioned is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way bill; c) Error in the address of the consignee to the extent that the locality and other details of the consignee are correct; d) Error in one or two digits of the document number mentioned in the e-way bill; e) Error in 4 or 6 digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned is correct; f) Error in one or two digits/characters of the vehicle number.

DO’s E-way bill system web-site address is http://ewaybill.nic.in The tax payer, that is, GSTIN holder, has to register in the e-way bill system and generate his/her username and password to use the e-way bill system.

The unregistered transporter, that is, the transporter not having GSTIN, can enrol by providing their PAN details, Aadhar details and generate his/ her username and password to use the e-way bill system Please don’t share your username and password with anybody so as to avoid mis-utilisation of your account and generation of e-way bills without your knowledge.

Help desks or offices of GST and E-way bill will never requests you for the username and password through phone or e-mail or SMS. Please watch the dash board on the main menu of e-way bill system for the various activities on the e-way bill system on your GSTIN during last 3 days. It also shows the e-way bills generated by your supplier or recipient on your GSTIN and your e-way bills rejected by your recipient or supplier.

Please watch out the pop-up alerts whenever you are generating the e-way bills and take appropriate action, if required.

Please see the SMS alert sent to your registered mobile number every day about the activities carried out on your GSTIN in the e-way bill system and take appropriate action, in case of abnormalities in the figure, by checking details on the e-way bill site.

& DON’Ts OF EWAY BILL

For quick and easy generation of e-way bills, the tax payer can create his/her masters of customers, suppliers, products and transporters. One time creation of these details, help him to pull these data easily while generating the e-way bills without typing GSTIN, Name and addresses of the supplier or customer and product details like HSN code and tax rates.

Before going to generate the e-way bill, please ensure that you have the proper document related to the goods in hand. This avoids the mistakes in generation of e-way bill.

Please ensure that the Part-B or the vehicle details are updated as and when it is changed for movement of that e-way bill or consignment.

If you are only moving the goods without the help of any transporters, then you can enter your GSTIN as the transporter id so that you can update the PART-B later.

Ensure that the consignment reaches the destination before the validity period expires.

Please Visit ‘Reject’ option every day to see the e-way bills generated by the other parties on your GSTIN. If any of these e-way bills or consignment does not belong to you, reject them so that it will not be accounted on your name in the system.

If you are carrying the multiple e-way bills in one vehicle, then you may generate One Consolidated e-way bill for all these e-way bills so that it becomes handy to carry by the driver of the vehicle.

Please ensure that MIS reports

are watched and downloaded on regular basis as the e-way bill system will not provide the e-way bills older than 15 days for the tax payers.

If you have updated your business address and contact details on the GST Common Portal, please use the ‘From GST Common Portal’ in ‘Update’ option to pull these details to the e-way bill system.

If the tax payer wants to use the SMS based e-way bill generation facility, then he can go to the ‘For SMS’ in ‘Registration’ option and register the username or sub-username, who has to be assigned this job so that user is enabled to generate the e-way bills through SMS. Please read the User Manual of SMS system for more details.

If the tax payer wants to use the mobile app based e-way bill generation facility, then he can go to the ‘For Mobile App’ in ‘Registration’ option and register the username or sub-username, who has to be assigned this job, along with the IMEI number of the mobile, so that user is enabled to generate the e-way bills through APP. If the tax payer is running his business round the clock or has multiple branches, then he can create the sub users and assign the roles to them on the e-way bill system. Using these sub-user accounts, his staff or branches can generate e-way bills and the system records these details with their account names so that later tax payer can view.

If your conveyance is detained unnecessary for more than half an hour by the department officer, you can raise the grievance using the detention report.

Monish Bhalla Author and GST expert Views expressed are personal

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q & A | MUKESH KUMAR, VC & CEO, GUJARAT MARITIME BOARD

‘Gujarat Maritime Cluster To Be One-Stop Solution For Industry’ Mukesh Kumar (second from left) at Hazira port

Q. The maritime sector is playing a vital role in sustaining growth of India’s trade and commerce. How do you see Gujarat contributing towards propelling the maritime sector growth in India?

A. Owing to its strategically located 1600 kms coastline and its entrepreneurial spirit, Gujarat has played a very pivotal role in developing the maritime infrastructure of India and has been a natural choice of maritime trade since very beginning.

Non-major ports of Gujarat handled a total cargo of 371 MMTPA in FY 2017-18 constituting about 30% of total cargo handled by Indian ports. The non-major ports also grew at a CAGR of 10.3% since FY 2008-09. During the same time, capacity of Gujarat ports have increased to 523 MMTPA in 2017-18 from 235 MMTPA in FY 2008-09, growing at CAGR of 9%. Gujarat is the only state in the country to have a “cradle to graveyard” concept for the ships.

While Gujarat has about 10 operational shipyards and about 8 more under various stages of development, it is also home to the world’s largest ship recycling yard at Alang. The state is strongly emerging as a new shipbuilding destination in South Asia with many projects in pipeline. Gujarat boasts a 60% share of Indian shipbuilding order book This unmatched growth in port capacity and traffic as well as maritime sector prog16

ress is largely attributed to proactive policy mechanism of the state (viz. Port Policy 1995, BOOT Policy 1997, Ship Building Policy 2010, LNG Terminal Policy 2012, Ship Recycling Policy 2016), greater industrial investments and port-led development model.

In the pursuit of strengthening Gujarat’s position as the leader in maritime industry and to incorporate the evolving requirements of the industry, we are now revising the port policy and devising an integrated maritime cum port policy aimed at integrating various areas like providing integrated logistics value chain and improving efficiency and effectiveness of logistics, providing comprehensive planned development of port cities, integrating state-level policies and facilitating innovative & strategic projects.

Q. What makes Gujarat a good investment destination in the maritime sector?

What are the investment avenues in the current scenario?

A. Emerging as “Investor Friendly” destinations in the country, Gujarat highlights a luxurious lifestyle of leisure, pleasure, business and investments. With a stable leadership and business environment, Gujarat is recognized as a frontrunner in proactive governance. wThe prominence of Gujarat in the maritime sector is by virtue of its long shipping-conducive coastline and being the nearest maritime outlet to the Middle East, Africa and Europe. Gujarat is one of the advanced

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states in terms of infrastructure facilities including enhanced roads and rail connectivity ideal for multimodal transportation. The state government is focused on developing stable and robust policies which assist in setting-up sustainable business ventures. As far as maritime activities and business is concerned, the state already houses 1 major and 48 non-major ports, rail linkages, shipbuilding & ship-repair yards, Ro-Pax ferry development.

The sector has been opened up for public-private partnership hence providing more opportunities to private players in the industry. The state government is currently focused on holistic development of the sector which has spurred investments in upcoming projects, covering all aspects of the maritime business, like: Maritime Cluster at Gandhinagar Maritime University at Gandhinagar Development of Ship Building yards (cluster-based approach) at Dahej, Bhavnagar, Navlakhi & Mandvi Ship Recycling facilities at Alang-Sosiya Ship Recycling Yard Developing Ro-Pax services LNG infrastructure Port Modernization and Automation Greenfield Port Development at Chhara, Nargol, Dahej & Vansi-Borsi Connectivity to various port locations Cruise, marine tourism Coastal Shipping Q. Could you elaborate how you foresee Maritime Cluster to strengthen the development of sector and benefit the players?

A. With India on the cusp of maritime revolution and poised to handling a large chunk of the world trade, there prevails a need for co-existence of all the essential components of the maritime sector including emphasis on soft infrastructure. Gujarat, in its efforts to create a complete ecosystem of ports and shipping services within the state on the lines of the ones that exist in London, Rotterdam, Hong Kong, Singapore, Dubai and other leading maritime nations, has initiated the development of maritime services based cluster (aka Gujarat Maritime Cluster) at GIFT City

in Gandhinagar, thus, providing an impetus to the maritime sector and further enhancing the competitiveness and growth of local maritime economy. The first of its kind initiative in India conceptualized by GMB in line with the vision of Prime Minister Narendra Modi, is also accepted under the Sagarmala program of Ministry of Shipping.

Gujarat Maritime Cluster aims at housing maritime related service providers such as Ship Owners, Ship Charterers, Shipping Agents, Ship Chandlers, Shipping Lines, Freight Forwarders, Customs Brokers, Ship Management, Shipping Finance & Insurance firms, Maritime Education Institutes, Maritime Trade Associations along with Regulators/Government Agencies to ensure Ease of Doing Business for the participants. The cluster is also planned to include banks and other sources of capital to incubate new businesses specific to shipping. These services are important from the perspective of competiveness and self-sufficiency of Gujarat as well as the Indian maritime sector. Strong and developed maritime ancillary services sector will not only strengthen the maritime value chain but also the potential to serve the maritime community in more cost efficient manner. Maritime Cluster would serve to be a one stop solution for the maritime industry.

When fully developed, it will offer competitive facilities such as taxation and fiscal benefits, easy regulations, geography-based incentives (like an SEZ), good business opportunities and world class infrastructure (high standards of working) to its members.

Q. Indian Maritime Sector has been facing the issue of shortage of skilled and industry-ready manpower. Does GMB plan to address the need for skill development in maritime sector?

A. Skills and Knowledge are the driving forces of economic growth and social development for any country. GMB recognizes the importance of skill development and availability of skilled manpower for overall sector development and hence takes pride in going ahead with its ambitious project of Maritime University, a centre of specialised maritime expertise as well as “Cradle of Innovation” which shall meet national as well as international need of skilled manpower. Gujarat Maritime University will focus on industry aligned courses such as maritime economics, port management, maritime finance, maritime law and logistics planning, amongst others.Hence, Gujarat maritime university

About Mukesh Kumar l 1996 bactch IAS office of Gujarat cadre l B.Tech (Electrical Engineering) from IIT, Kanpur l Executive Masters in Public Administration from the Maxwell School, Syracuse University, USA l 20 years professional experience in public administration l Began civil services career as assistant collector (Vadodara) and went on to become collector of Dangs, l Municipal Commissioner of will provide for skilled manpower in diverse areas of ports and shipping.

Q. How do you see GMB contributing towards environmental sustainability?

A. Over the years, GMB has taken several measures to support healthier environment and maintain ecological balance despite rapid maritime activities.

The commissioning of Ro-Pax ferry Services between Ghogha and Dahej in Gujarat is a revolutionary step for India in transportation and logistics. By allowing vehicles with passenger aboard and cargo vehicles, the ferry service will save travel time and fuel and clear congested roads. Effective usage of this service envisages reduction in carbon foot print by 41000 MT per annum.GMB also plans to extend the Ro-Pax services to other locations within the state across the Gulf of Kutch and Gulf of Khambhat viz. Development of Ro-Pax Terminal at Surat and Passenger ferry service between Port Victor & Surat.There are also ambitious plans to connect Surat with Mumbai by this link.

GMB has developed a state-of-theart Treatment, Storage, Disposal Facility (TSDF) at the world’s largest Ship Recycling yard at Alang in Gujarat to upgrade environment management. This facility which includes Effluent Treatment Plant, Incinerator and Landfill Cells is made operational by engaging external agencies for safe handling and treatment/disposal of hazardous waste matter, municipal solid waste and liquid waste. Besides, Alang is also set for a modernization project, funded by Japan International Co-operation Agency (JICA), that will

Bhavnagar, Rajkot and Ahmedabad, l Managing Director of Industrial Extension Bureau (iNDEXTB), l Established Institute of Infrastructure, Technology, Research & Management (IIT RAM) as first the Director General of the institute during his tenure with the education department. l As the MD, iNDEXTb, he had anchored Vibrant Gujarat Global Investors Summits of 2011 & 2013, construction of state-of-the-art Business & Convention Centre - Mahatma Mandir l As the municipal commissioner of Ahmedabad, his efforts led to declaration of Ahmedabad as India’s only “World Heritage City” by UNESCO in July 2017. pave the way for safer and more environment friendly operations. The project will include upgradation and expansion of existing yards, improve waste collection and disposal, improve safety systems and develop housing, healthcare facilities and social amenities for workers.

Q. India has a maritime history dating back to around 4500 years, since the Indus valley civilization. What are the plans to showcase our nation’s rich maritime heritage?

A. Through the flagship programme Sagarmala, we closely working with Ministry of Shipping (MoS) and various stakeholders to showcase India’s rich maritime heritage through development of worldclass National Maritime Heritage Complex (NMHC) at Lothal, the Harappan era site.

Lothal displays engineering standards used in creating an artificial dock that show high standards of scientific and engineering skills, far more advanced than anywhere else in the world in 3rd millennium BC. The brainchild of PM Modi, this initiative aims to showcase the achievements of India’s early seafarers and nation’s maritime history. The complex will also have a huge museum to display India’s heritage of inland waterways and trade through water route..

Preliminary work on design elements of the proposed heritage complex has been completed and consultations from experts, historians, academicians are now under processon the themes, design vision, best strategies for collection of artefacts and design approaches, etc.

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Success story

Sailing with tides: How JM Baxi created a legacy in shipping?

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he East India Company ruled India since the mid-18th century and they ensured that all major businesses were controlled for and by British interests. Indian entrepreneurs made numerous forays into various industries but their efforts were always thwarted by the Colonial regime through restrictive licensing and other policy measures.

The second decade of 20th century saw Indian trade and the Indian business spirit awakening. The World War I and its aftermath saw rising investments in many segments and India’s manufacturing output in this crucial period grew at a decent pace. The sectors that some of the pioneering Indians were making a foray into were as diverse as Textiles, Jute, Chemicals, Iron and Steel, Coal, Paper, Sugar, Coffee, Cement, Small Engineering Enterprises and so on – mainly because they were allowed, albeit reluctantly to do so by the British Government, as long as they did not clash with the imperial British interests of those time.

The story of J M Baxi began in such a scenario when two enterprising brothers, Mani18

lal H. Kotak and Jayantilal H. Kotak, came to Bombay from their hometown Keshod “ in coastal district of Junagadh in search of fortune”. Clearly fortunes of Kotak brothers were to be linked to the sea, as after successfully contemplating and foraying into a few odd jobs, they were offered a partnership in a firm floated by Mr. Baxi, to look for business in the maritime sector. Thus, begun the illustrious journey of J M Baxi & Co in the year 1916 with headquarter in erstwhile Bombay.

Kotak brothers were mainly to act as subagents, liaising with the shipping companies operating from the Gujarat ports. The young Kotaks convinced some of the large agency houses to appoint J. M. Baxi as their subagent in many of the Gujarat ports, where the company began to perform ship husbanding and agency work. The firm opened offices in various ports in Gujarat and remained one of the main sub-agents for many years.

The end of World War I and the rising awareness of the Swadeshi (nationalist) movement brought significant changes to the way native entities were then treated by the British government. Instead of hindering and

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alienating them, the British began tentatively to placate them. A major factor behind this change of heart was the critical support the native businesses had provided to the British war effort.

However, the home-grown shipping sector during that time was not so fortunate. It continued to be dominated and controlled by the British shipping lobby. One of the earliest Indian shipping companies was the Tata Line, started by the renowned industrialist J. N. Tata. It began operations with two ships, primarily transporting cotton to Japan. To kill the competition, the British lines dropped their rates drastically (even carrying cargo free at times), making Tata Line lose money and eventually shutting down. The fate of other native entities was similar, such as the Swadeshi Steamship Company and the Bengal Steamship Company. The only Indian company that was able to survive the struggle against the British monopoly was the Scindia Steam Navigation Company.

Legend has it that after the end of World War I, Seth Walchand Hirachand (a wellknown Indian industrialist) learned that the

Krishna Kotak

Chairman Dhruv Kotak, Joint MD

Vir Kotak, Joint MD

Maharaja Scindia of Gwalior was looking to sell off the hospital ship SSLoyalty, which was then docked in Mumbai. Seth Walchand, together with Narottam Morarjee and two other native businessmen, formed the Scindia Steam Navigation Co, which purchased the vessel. It sailed on its maiden voyage from Bombay to London on April 5, 1919.

This day is now celebrated as the National Maritime Day of India.

The steamships dominated the trade at that time, sailing frequently to the main ports of call, like Mumbai and Karachi. They, however, also traded with the smaller anchorage seaports dotting the Gujarat coast. They typically would drop their anchor at a distance from the coastline and would be loaded with export cargoes, by smaller coastal vessels.

All the shipping companies preferred to nominate large agency houses as their agents and the larger ports of Calcutta, Madras, Bombay, Cochin and Karachi (then part of India) were controlled by British agency houses.

However, the foreign shipping lines that monopolised the shipping trade in India at that time also needed capable, enterprising and reliable shipping agents who could attend to the requirements of their ships calling into those smaller Indian ports where the managing houses did not have an effective presence.

It was in this crucial segment, specifically in the locally administered minor ports of Gujarat, J. M. Baxi began to concentrate and started providing ship husbandry and agency support services that would soon become a hallmark for its trusted, cost-effective and customised service offerings.

Lighterage trade at anchorage ports, like Bedi, Magdalla, Navlakhi and Okha, consisted of handling food grains, salt, oil seeds and

cotton yarn and these formed a mainstay of J. M. Baxi’s business, which acted as a shipping agent by booking export cargo from the local trading houses. The anchorage ports of Gujarat were an advantage as they allowed much quicker and easier vessel and cargo turnaround since vessels could be handled with many fewer restrictions than at a berth.

There was also the regular coastal movement of Salt from Gujarat ports on the west coast to Calcutta and other east coast ports, and movement of coal on the return leg from east coast to the west. Owing to a growing presence in Gujarat, J. M. Baxi could also manage to make a name for itself in this trade segment during that time.

The British and other foreign shipping lines also needed agents to reach out into the local trade and obtain their merchandise cargo for shipment on their vessels. This activity was handled by companies then known as house brokers. The enterprising Kotak brothers entered into a partnership with Mr Nemichand Jamnadas, who ran a cargo broking company for a then well-known shipping line known as the Mogul Line. It was, thus, in a 250 sq ft basement of the office of Mogul Line in the Turner Morrison Building in the heart of the shipping business district in Mumbai that J M Baxi upscaled its operations in the later years. J M Baxi continues to operate from this office even today!

House brokers representing Indian lines had a very tough job booking cargoes in those days, since the cartel of the British lines ensured all cargoes were booked on their ships through either huge discounted freight or other trade restrictions imposed in connivance with the liner conferences. The first Indian vessel, SS Loyalty, was boycotted by

the British for a long time and P&O even resorted to carrying rice free of any freight charges from Calcutta, just to crush the fledgling Scindia Line. Similarly, passenger liners, which could attract passengers owing to nationalistic favour, found it tough when the foreign liners started carrying passengers free. In some instances, the passengers boarding a foreign carrier were offered gifts such as a free handkerchief.

J M Baxi and its affiliate N Jamnadas & Co. managed to survive such ruthless competition with the strong support of the nationalistic Indian traders. The Indian merchants and trading houses were known to be dealing independently with many parts of the world other than Europe, which was dominated by the British lines. The routes covered were east and north Africa (Zanzibar, Madagascar, Mogadishu, Alexandria, Tripoli, Djibouti, Aden etc.). These trades were developed especially by the Gujarati migrants of the 19th century who would regularly import Textiles, Spices, Cotton, Jute and such commodities from India.

During the later years, a substantial portion of J M Baxi’s business also came from handling passenger ship operations, especially ferrying Haj pilgrims from the Indian subcontinent to Jeddah. This traffic received a big boost in 1932, when the British government enacted the Port Haj Committees Act, which provided funding to the Haj Committee. This committee planned and managed the entire pilgrimage, starting from Bombay and Calcutta as the two embarkation points.

The government also granted an approval for the sea-based Haj pilgrimage to Mogul Line ships, which was owned by Turner Morrison & Co. As a house broker and agent of Mogul

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Lines, N Jamnadas and J M Baxi was actively engaged in handling the operations of the passenger vessels.

Meanwhile, Bhagwanbhai Kotak (the son of Jayantilal Kotak and the nephew of Manilal Kotak) began an apprenticeship in J.M Baxi soon after completing his basic education. With an inquisitive mind ready to learn, Bhagwanbhai began travelling extensively to the Red Sea ports, and domestically, in general, all over India, including the Gujarat ports in particular, to gain a first-hand knowledge of the shipping support service industry. He rapidly became an authority and flag bearer in this trade. His tremendous passion for reading, music, art and culture and his astute grasp of world history and global events quickly endeared him to his customers, clients and contemporaries alike.

Bhagwanbhai’s younger brother, Nareshbhai joined him later in the business and with the passing away of Vasantbhai (Manilalbhai’s son), Bhagwanbhai and Nareshbhai would actively assume the stewardship of J M Baxi. The scope, range and business of J M Baxi under their leadership began to expand rapidly and exponentially post 1947.

The basic credo and philosophy that J M Baxi propounded were simple and timeless and can be epitomised in just three underlying values: innovation, commitment and performance. These three attributes were the hallmark that distinguished the J M Baxi Group and continues to do so to this date.

The first two decades of India’s independence were a momentous period in the evolution of J M Baxi Group, as a second generation of the Kotak family took charge of the business, overseeing the group as it spread its wings to newer ports and new business horizons to emerge as one of the earliest diversified logistics groups in the country. In this second part of our series, we take you through some of the key milestones of this momentous transformation.

During this tumultuous time, J M Baxi Group was involved in independent India’s grand economic initiatives, such as the development of India’s ports and port infrastructure, the tackling of the food grain crisis followed subsequently by the advent of the Green Revolution, addressing the burgeoning trade in tea, iron ore and other commodities and the harnessing of the Indo-Soviet barter trade relationship. In some of these, J M Baxi Group even contributed a few small but significant footnotes to the ongoing narrative of India’s maritime and logistics history!

The notable highlights of this tumultuous 20

time also included the acquisition of United at various designated ports, a good numLiner Agency (ULA). As if to symbolise the ber of them actually calling at Kandla and very essence of India’s independence, the other smaller ports off the west coast of InKotak family acquired ULA of India from dia. However, as alongside draft conditions its three erstwhile Scandinavian owners (Fast at several of these smaller ports were not Asiatic, Brastomand and Wilh Wilhelmsen). suited for the discharge of cargo from large ULA, a liner shipping company, was in the bulkers, grain-handling called for extensive business of providing agency services to the grain lighterage through barging operations Waterman Steamship Corporation, which at the anchorages, which made the handling owned LASH vessels and LASH barges. of food grains difficult and challenging given The acquisition was noteworthy for two im- the shortage of suitable barges. The situation portant reasons. Firstly, it was at a time when called for bold solutions and innovative apIndia’s regulatory framework actually tended proaches.

Thus, when a PL-480 shipment of wheat to frown upon such a radical private-sector initiative. Secondly, the acquisition was note- arrived in India, J M Baxi & Co. would worthy because ULA would eventually be- quickly mobilise a convoy of suitable barges come, many decades later, a primary launch and tugboats for lightering the grains from vehicle for J M Baxi Group to venture into mother vessels, and achieve timely vessel port infrastructure and operations (a story turnaround through its smooth handling of which we will dwell on in our succeeding the entire unloading operation.

Finding the barges as and when they were newsletter editions). Meanwhile, the irony of the acquisition from foreign owners was not needed was no easy task and called for skills lost to anybody, since ULA itself was incor- in logistics coordination for offloading the porated in the very year that India achieved grain from the vessels and for ensuring quick vessel turnarounds and the timely onward movement of the grain by rail to distant locations. It was a highly demanding and critical situation, considering that there was a national food emergency and food grain imports from the US were a critical lifeline, in what was then referred to as a ship-to-mouth situation.

The bitter experience gained in the course of grain lighterage operations made it clear that a fleet of port craft (such as barges, tugs and pontoons), however small, was an essential ingredient of being in the port services business. This realisation led J M Baxi Group to later acquire a barge fleet, and a number of barges (both dumb and self-propelled ones) were added in the subsequent years.

Kandla port has another interesting historical footnote that particularly highlights J M independence from British rule in 1947.

The post-independence era saw J M Baxi Baxi Group’s innovative approach to finding Group’s mettle and its evolution as full- out-of-the-box solutions. The port of Calcutfledged port agents and stevedores. During ta was badly affected in the 1960s by the turthe 1950s and 1960s, India had to resort to moil and turbulence of Naxalbari movement. large-scale food grain imports to meet the The origin of the movement was particularly severe shortfall in domestic food production felt in the tea gardens of North Bengal and caused by famines and the vagaries of the Assam in the mid-1960s and tea exports weather. A key turning point here came when from the region stalled. Export operations in 1954 the US Congress passed the Agricul- by road and sea through the port of Calcuttural Trade Development & Assistance Act, ta had come to a complete standstill and inwidely known as Public Law (PL) 480, by ventories had started building up. When J M which the US government started shipping Baxi & Co. was approached, it came up with a unique proposal, urging the tea exporters to food grains to India.

The grain shipments were exclusively consider moving their tea shipments tempobrought by US flag ships, as mandated by rarily from the west coast ports of Kandla and the US government and were to be received Mumbai by rail.

From a purely static single-service provider as a shipping agency and stevedore, J M Baxi became a multiple-service provider in turnkey logistics during this phase of its evolution

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HIGH GST KILLING forex

18% GST A KILLER FOR FIRMS SERVICING FOREIGN SHIPS

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ederation of Kutch Industries Association (FOKIA), an umbrella organization of large, medium & small industries and associations of Kutch, have sought exemption from Goods and Services Tax (GST) on safety services on foreign-registered ships and coastal shipping that call on Indian ports and consider them as export of services Routine inspection, maintenance and certification is required to be carried out as per International Maritime Organization (IMO) and SOLAS (Safety of Life at Sea) Regulations.

As per present GST norms, charges for servicing of safety equipment on ships are subject to 18% GST. Foreign shipowners and foreign flagged ships cannot take input tax credit of GST paid by them in India when they obtain safety equipment services from local companies.

This 18% tax burden on technical services is considered to be very high by many ship owners and shipping companies based in places like Greece, Germany, China, the Middle-East, Singapore, Hong Kong and the US because they do not get input tax credit for GST paid in India as these com-

panies are based abroad.

Under current GST regime, only those services which are offered by Indian companies at a location outside of India are considered as export of services. Any services offered to foreign companies and for-

India is losing out on precious foreign exchange as vessels prefer to get safety services done Colombo or Singapore where input tax credit is refunded eign ships even in Indian waters and Indian ports should be considered as export of services when the payment is made in foreign exchange to Indian Companies thereby the services should be exempt from GST. Since neighbouring maritime nations like Singapore, Sri Lanka and UAE have Free Zones and are offering GST exemp-

tions on marine services, local maritime auxiliary service providing firms are losing out on lot of business as the foreign ship owners have started obtaining services from our neighbouring tax-friendly countries.

“Manpower and technical services are considered the backbone of the Indian economy and India has such huge coastline the government should declare services offered to Foreign Ships in Indian Waters as “Export of Services” since the recipient is a foreign company and foreign ship owner based abroad. The exemption will lead to substantial income to India by way of foreign exchange,” FOKIA stated in its letter to finance minister Arun Jaitley.

This will be taken up in the next GST Council meeting, sources said.

FOKIA has urged exemption from GST on 1) Lifeboat and Davit Servicing 2) Liferaft Servicing as required 3) Fire Extinguishers& Fire Extinguishing System Servicing 4) Servicing of breathing apparatus, emergency escape breathing device, immersion suits, thermal protective aids etc

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5) Load testing of ship’s cranes, lifting appliances, Derricks and their loose gears as required by Indian Dock Worker’s (Safety, Health & Welfare) Regulations 1990 6) Bunkering services The waiver of GST is requested for services provided by establishments approved

by Directorate General of Shipping (Govt. of India) and Directorate General of Factory Advice Services and Labour Institute (DGFASLI) Govt. of India.

GST on Foreign Flag Ships Calling Indian Ports: Ships calling Indian Ports for cargo loading and unloading are levied with 18% GST when they receive any safety services or any type of ship repairs.

90-95% of ships plying on Indian coasts are foreign-owned and foreign flag bearing The services offered by Indian companies to these ships should be considered as export of services as these ships are owned by foreign companies,who pay Indian com-

HOW IT HURTS lForeign ship owners preferring neighbouring maritime countries that refund input tax credit lSharp drop in quantum of work done by many Indian marine safety services providers lFall in revenue being as much as 30-40% lMany companies forced to reduce manpower lIndia losing out on precious foreign exchange panies in US dollars thereby remitting valuable foreign exchange to our country.

Increasing the GST to 18% for export services offered to foreign-owned ships making India extremely unattractive to foreign ship owners.

Indian GST rates for foreign ships are among the highest in the world Many ship owners either prefer to obtain

services in other maritime industry friendly countries like Singapore and Fujairah or they want Indian companies to bear the GST, thereby eating into the profit margins of local firms Shipping industry has still not recovered after the financial crisis of 2008 (low freight rates). Therefore ship owners are preferring countries where it is cheaper to do business.

The government has to waive the burden of high GST taxation on foreign companies and foreign ships to promote the local maritime auxiliary industries and to bring more foreign exchange into the country.

TAX HAVENS Singapore: GST refunded back to foreign ships by government Fujairah: Free Zone China: GST exempt for internationally trading foreign flag ships Sri Lanka: Much lesser tax rates than India

Contact person: Rahul Nair 80002 00008

NEWS IN BRIEF

IPA appoints Tech Mahindra for MSP

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ndian Ports Association (IPA) has recently appointed Tech Mahindra as the Managed Service Provider (MSP) for the five major ports at Mumbai, Kolkata, Chennai, Deendayal and Paradip ports.

This initiative is a major step towards integrating the maritime sector and fostering growth and development of major public sector ports in the country.

According to official release, the proposed Enterprise Business System will comprise of three core solution components - Port Operations Solution, stan-

dard ERP solutions, and auxiliary solutions and would get integrate with Port Community System (PCS) and other retained applications of ports, Enterprise Business standard processes and shared infrastructure on cloud, making it next generation modern system which will serve ports purpose in coming years.

The key benefits from the system in port and shipping sector include: Improvement in India’s ranking in ease of doing business, enablement of faster request processing in delivery of services

with better turnaround time, reduction in manual intervention or documentation, reduction in overall transaction time and costs, improvement in the efficiency of port operations, quick turn round of vessel and subsequent less dwell time, dashboard to ports and ministry of shipping officials for real-time MIS on cargo or ship movements and EXIM transactions, simplified and accelerated procedures for cargo entry, exit or transit, enhanced transparency across systems.

Number of seafarers increased

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he number of seafarers in India has increased by over 60,000. According to Union Minister of State for Shipping Mansukh L Mandaviya, while only about 92, 000 people were engaged in ship related jobs, their number has gone up to 1,54,000 now.

The Minister said, the government has taken steps to increase employment opportunities for the youth in this sector. The reforms under this include improving the sea farers examination.

He said, while earlier only one to two per cent applicants could clear the said examination, with improved curriculum the pass percentage has gone up to 10 per cent now. This has resulted in more and more young people qualifying for jobs in the sector.

The minister further said that rules and regulations have been strengthened for ensuring that students training to be seafarers get a chance to visit the sea during their training period.

This, he said, will give them better exposure and prepare them well for jobs in the sector 24

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Major ports clock 5.13% growth in cargo handling The major ports have recorded a growth of 5.13% and together handled 288.38 million tons cargo during the period April to August o as against 274.32 million tonnes handled during the same period of previous year. nine major ports – Kolkata (incl.

Haldia), Paradip, Visakhapatnam, Kamarajar, Chennai, Cochin, New Mangalore, JNPT and Deendayal have registered positive growth in traffic.

During the period April to August

2018, Deendayal (Kandla) Port handled the highest volume of traffic i.e.

48.9 million tonnes (16.95%), followed by Paradip with 44.79 million tonnes (15.53%), followed by JNPT with 28.99 million tonnes (10.05 %), Visakhapatnam with 26.94 million tonnes (9.34%), Kolkata (Incl. Haldia) with 25.44 million tonnes (8.82%).

Together, these ports handled around 61% of major port traffic, according to official data.

Fake Sagarmala website

Ministry of Shipping has noticed that a fake website link with the url: http:// www.sagarproject.com is being sent

through emails to job seekers and other stakeholders of Sagarmala programme. This fake website that may appear to be similar or identical to the original Sagarmala Website contains a false advertisement about recruitment of Engineer trainee and Diploma trainee.

Cautioning all stakeholders associated with Sagarmala programme about the

fake website, the ministry reminded that the official domain of Sagarmala website is http://www.sagarmala.gov.in/ The ministry through a release informed, it is here by cautioned against any such false and misleading advertisements. It may be noted, that such acts of fraud, misrepresentation, falsification and fabrication of information as seen here are clear violations under the Information Technology Act and the Indian Penal Code, for which swift and strict criminal actions are being initiated against all such fraudulent entities.

Marine lines travelogue The coastal district of Dwarka on Gujarat’s western-most tip is much more than just religious tourism. A number of virgin beaches around Dwarka, which are unscathed by hazards of overflowing tourist along with some scrumptious local food leaves one wanting for more.

Freelance writer Rajeev Khanna recollects his two-day trip

Sojourn by the sea

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he coastline of the district is ready to embrace anyone who has the spirit to explore, and, mind you no one returns disappointed. One need not go by the tourist brochures that are being offered. It is just going there with an open mind that one can imbibe lots in terms of knowledge, fun, calmness and serenity.

Not many would know that just a few kilometers before Dwarka is a Bechtel Beach that can give a stiff competi26

tion to any of the prime beaches across the country. The first thing that would strike a visitor is the very firangi sounding name of the beach, that too in Saurashtra, that is laden with unmatched history. Only a few can relate that the beach draws its name from San Francisco-based engineering major Bechtel Group Inc. whose foreigner employees preferred to spend their leisure time on this beach while working to construct Reliance’s refinery near Jamnagar,

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about 150 km away.

The foreigners left but their legacy remained in the form of this beach deriving its un-Indian name.

One need not be told the importance of Dwarka in Hindu mythology and it is a dream of every practicing Hindu to visit the Dwarka temple at least one in his or her lifetime. Over the years, the area around the temple has witnessed a sea change in terms of cleanliness and amenities being made available. But

Sangan Kotda Beach, Gujarat what still comes as an annoyance is the fact when the cops at the entrance tell you to keep your wallets in a safe place on account of pickpockets on the prowl.

One can cap the spiritual experience by going across to the Bet Dwarka island on a ferry and visit the temples there but it needs to be pointed that the place needs a good cleanliness drive along with an effort to tackle the stray cattle and the dung that greets the visitors as one de-boards the ferry.

The spiritual part over, one can make a quick visit to the township of Mithapur. The journey of the present day town began in 1939 with the Tatas taking over the Okha Salt Works. It is the Tata Chemicals that is running the township catering to all the administrative needs.

The place has a lot to offer when it comes to the salt and chemical industry in India.

The journey further takes the travelers to the port town of Okha on the

western-most tip of land of western India along the Arabian Sea. This part of the town has a beach and a European Guest House that is currently under the Gujarat Maritime Board. One can spend hours just gazing at the vast expanse of ocean in solitude.

From Okha one has to take a detour to visit a small settlement of Poshitra.

Poshitra is a delight for anyone looking for marine biodiversity on the 20 islands that are located in its vicinity. It is also

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Fafda, jalebis & shots of chhaas soda he spiritual apart, it is an experience to wander in the by-lanes of this town and a must have here is the local drink ‘Chhaas Soda’. It is a concoction of chhaas (buttermilk) and soda that works wonders on the stomach in terms of digesting the food that one has taken. The hard water in the area makes it a bit difficult to digest the food. The cool drink available in every second paan shop is a must after gorging on fafda. Fafda is a quintessential Saurashtra breakfast – long deep-friend sticks made by flattening the gram flour dough. Generally pepped with hing (asafetida) and served with fried and salted green chillies along with finely sliced raw papaya. Fafda is incomplete without the jalebi, a dessert soaked in sugar syrup after being deep fried.

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a regular site for dolphins. Experts say that this area with high coral diversity is an ideal venue to witness reef ecosystem.

One can experience the diversity in the form of 37 species of hard corals, five species of soft corals, reef fish, sponges, sea weeds, jelly fish, sea cucumber, sea slug, octopus, sea star, puffer fish, shrimp, crabs, sea turtle, window pane oyster, sea anemone etc. In addition to these are rock pools with rocks covered by barnacles and oysters that attract birds

like plovers and lapwings. Then there are limestone fossils that underline that the place was once submerged.

If one is not satiated by what Poshitra has to offer, the journey has to be taken further to a small place called Sangan Kotda. A temple at a hill top and a small beach with very clear sea water makes it an ideal tourist destination where one can enjoy the serenity while being with his own self. At times one is compelled to thank the administration for not having

given it an over exposure in tourism or it would have lost calmness. Such places can be enjoyed only by those who come for a specific purpose.

The tour can finally be capped once again on a spiritual note by visiting the NageshwarShiva temple, one of the 12 Jyotirlingas in India.

The next time you are heading for Dwarka, do take the step beyond spirituality and you will awaken to the other delights that the coastline has to offer.

Chana Chevdo, a must have in port wn Okha

Poshitra

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visit to Okha cannot be complete without having a plate of ‘Chana Chevda’ outside the railway station. The spiced up black gram curry topped with crunch chevda (a mixture of 28

pounded rice) is served with two paavs (breads).Accompanied by tea, this makes an ideal breakfast.

Interestingly, the seller starts his hand cart at 8am and wraps up by 11am.

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How To Reach Dwarka Nearest Airport: Jamnagar (135 km) From Jamnagar take the state highway Okha & Dwarka are well-connected to all parts of India by trains

You can write to Rajeev at rajeevsolan@gmail.com

HEALTH

DIABETES CAN BE REVERSED 100%

C

Kapil Dave

an diabetes be cured? Ask doctors Case study 1 of VOD team” . I wish them all the best and they would scream “No”. This in their future endeavours.

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Rakesh did a three- day intensive years. He was also suffering from heart But, the fact is: YES..DIABETES CAN VOD’S (Victory Over Diabetes) - diadisease (CAD) and undergone bypass BE REVERSED. You read that correctly! betes reversal program. surgery. His fasting was 94 and PP was We at ‘Victory Over Diabetes’ have done this; “I was very enthusiastic to join the 140. HbA1c was 6.19%. we have actually cured diabetics, who were diabetes reversal program. From day “I was initially skeptical about earlier told that they would have to live with two itself, I could feel the extra strength complete diabetes reversal within this disorder for who life. in my body due to enhanced glucose a time period of only 2-3 months. I Immediately, you are tempted to know: uptake by the body. I was really astonattended VOD’s three days program “How is this possible?” ished at my blood sugar readings and and was completely taken aback by the Understanding diabetes eagerly looked forward methodical way in which the to the decrease in my entire program was conducted.

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TObjectives and Goals of VOD: Mind conditioning which includes medTo focus on diabetes reversal and preven- exercises mainly consist of interval type of training (i.e., upping your heart rate and then itation and relaxation techniques are the tive program by laying emphasis on: gradually decreasing the intensity of exer- perfect antidote for these stressors or stress 1. Health promoting diet, cise). This is done intermittently (a number causing hormones. Sitting in silence brings 2. Easy and effective exercise plan and 3. Mind conditioning (training) through of times) to achieve a peak threshold. Types the mind to a quieter state and when pracsimple meditation and relaxation guidelines. of exercises included in this are: aerobics ticed with relaxation, it helps us to internalize type of training, resistance training or muscle our mind and our thought patterns. A deeper Health promoting diet Diet is one of the main cornerstones for training and flexibility (stretching, both static state of complete calmness and stillness is witnessed. This experience practiced over preventing and reversing diabetes mellitus, and dynamic).

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MARINE LINES, October 2018. RNI No. Under Process, Title Code: GUJENG16193