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Measures to reduce adverse impact of global container shortage

25/09/2021 at 8:07 PM

New Delhi, Sept 25: Disruptions due to the COVID Pandemic resulted in high shipping freight rates and container shortage globalky, a problem which has been raised repeatedly by exporters in India too.

It has been brought out in stakeholder consultations by MOCI that the problem could be eased through creating policy incentives discouraging export of empty containers. As per the present structure, keeping containers beyond a period of six months attracts an import duty as deemed import. While the policy is designed to discourage long dwell time of containers and to promote faster turnaround, It has been reported that this sometimes creates perverse incentive among shipping lines to export empty containers to evade duty payment on containers which are lying empty.

Working on  one of the action tracks identified by the government to ease the problem, as a  temporary measure to improve containers available presently for export of containerised cargo and with aim of promoting export of laden marine containers, the CBIC has issued a guidance to field offices to extend this period by 3 months where the container is being taken out of the country in laden condition provided the 6 month period falls before enforcement of FY22 (circular no. 21/2021-Customs dated 24th September 2021), Extension is to be sought by the concerned importer.

This step is expected to reduce the export of the empty containers from the country on ground of imposition of import duty, thus increasing the availability of containers for the trade.

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