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Maritime Blogs

Blogs by Maritime Community

Posted by on in Maritime Blog

The World Maritime Day is being formally celebrated by the International Maritime Organisation (IMO) on 28 September 2017.

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Adopted in 2004 the Ballast Water Management, BWM Convention (the ‘convention’), is the International Convention for the control and management of ship’s ballast water and sediments.

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All inflatable life rafts have an emergency pack which according to SOLAS requirement, there are SOLAS A and B two type. Here we will learn the difference between SOLAS A and B.

b2ap3_thumbnail_liferaft-equipment-solas-a-pack.jpg

1.Life rafts: Standards of equipment

Life Raft Construction

  • Insulating double wall canopy
  • Insulating Heat Sealed Inflatable Floor
  • Painter/Static Line (Length, 130 ft.)
  • CO2 Inflation System
  • Painter/Static Line Attachment Point
    (1700 lbs. test) (6-10 Person Capacity)
  • Righting Strap
  • Lifelines (Inner)
  • Lifelines (Outer)
  • Exterior Locator Light
  • Interior Light
  • Pressure Relief Valves
  • Large Rectangular Ballast Pockets
  • Retro-Reflective Tape
  • Boarding Ladder
  • Boarding Handholds
  • Static Line Weak Link
  • Canopy Support Arches
  • Sealed Buoyancy Chambers
  • Approved Hydrostatic Release
  • Manual Topping Off Valves
  • Double Layer Storm Doors
  • Fiberglass/Fabric Container
  • Pressure Relief Valve Plugs

Life Raft Equipment

  • Sea Anchor(Automatically Deployed)
  • Floating/Heaving Line (Length 100 ft.)
  • Rain Water Collector
  • Floating Knife
  • Waterproof Equipment Bag
  • Raft Use Instructions
  • Individual Thermal Protective Aids (2 ea.)
  • Paddles
  • Manual Inflation/Bilge Pump
  • Repair Clamps (6 ea.)
  • Adhesive & Patch Repair Kit

Additional equipment required to bring life-raft to SOLAS approved standard. SOLAS A is more comprehensive than SAOLA B!

SOLAS “B” EQUIPMENT:   (in addition to all standard equipment described above)

  • Waterproof Flashlight
  • Spare Flashlight Bulb
  • Spare Flashlight “D” Cell Batteries (3 ea.)
  • Sponges (2 ea.)
  • Bailer
  • SOLAS Parachute Distress Signals (2 ea.)
  • SOLAS Red Handheld Distress Signals (2 ea.)
  • SOLAS Smoke Signal
  • Seasick Bags (1 Per Person)
  • Water Storage Bag
  • Thermal Protective Aid
  • Signal Mirror
  • First Aid Kit
  • Signaling Whistle
  • Anti-Seasickness Pills (6 Per Person)
  • Spare Sea Anchor

SOLAS “A” EQUIPMENT:  (in addition to all standard and SOLAS B equipment described above)

  • Graduated Drinking Cup
  • Drinking Water (6-20 Person Capacity – 1½ Liters Per Person)
  • Food Ration (10 Kilo-Joules Per Person)
  • Can Opener
  • Fishing Kit
  • SOLAS Parachute Distress Signals (2 Add’l, 4 total)
  • SOLAS Red Handheld Distress Signals (2 Add’l, 4 total))
  • SOLAS Smoke Signal (1 Add’l, 2 total)
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A large number of cases reported about the difficulties faced by Indian Seafarer abroad who are recruited and placed on board foreign flag Ships by unlicensed/unauthorized entities.

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 cargoship.jpg

“The tax struc­ture de­feats the en­tire ar­gu­ment of equiv­a­lence of pre-and post-GST era and would add to the tax bur­den of In­dian ship­ping com­pa­nies” 

- Bharat Sheth, deputy chair­man and man­ag­ing di­rec­tor at Great East­ern Ship­ping, told Busi­ness Stan­dard.

In­dus­try in­sid­ers say the cru­cial tax reform may work against do­mes­tic ship­ping com­pa­nies as tax im­po­si­tion at the time of asset cre­ation and dis­crim­i­na­tion be­tween do­mes­tic and for­eign ship­ping firms would dis­cour­age fresh in­vest­ments and erode global com­pet­i­tive­ness.

It remains to be seen how the shipping and logistics sector adapts to the new changes brought about by the GST. Although there are concerns that the sector might be adversely affected.

The Goods and Ser­vices Tax (GST) rate struc­ture is ex­pected to have an ad­verse im­pact on In­dia’s ship­ping in­dus­try. Tax levy to erode global com­pet­i­tive­ness, dis­cour­age fresh in­vest­ments

While the in­dus­try has raised sev­eral points of con­cern in the GST tax struc­ture, a ma­jor is­sue is the levy of 5 per cent in­te­grated GST (IGST) — the tax levied both on in­ter-state sup­ply of goods and ser­vices and im­ports — on im­port of ves­sels and on sale of ships out­side In­dia.

“It (5 per cent levy) sim­ply means that it will raise both our cap­i­tal cost and work­ing cap­i­tal. This is very dis­cour­ag­ing for the in­dus­try,” ex­plained Sheth. Un­der the cur­rent tax regime, the pur­chase or sale of a ship does not at­tract any tax.“ The type of ves­sels ac­quired by the in­dus­try from in­ter­na­tional mar­kets are not built in In­dia and these are mainly sec­ond-hand ac­qui­si­tions of which there is no avail­abil­ity in In­dia,” said Sheth.

Both of the above de­feat the ar­gu­ment of com­pen­sat­ing coun­ter­vail­ing duty and spe­cial ad­di­tional duty for pro­mot­ing In­dian ship­build­ing, Sheth said. The in­dus­try is also con­cerned that firms would not be able to utilise cred­its of such IGST for a long pe­riod of time and credit would thus be­come a cost in their books, ad­versely im­pact­ing their busi­ness op­er­a­tions.

If an In­dian com­pany were to sell a ship to a for­eign buyer, which may per­haps have never en­tered In­dia, then too it is li­able to pay the 5 per cent IGST. Sheth said, “At present, sales out­side In­dia are not taxed as the si­tus of the sale is out­side In­dia. This po­si­tion should ef­fec­tively con­tinue un­der the GST regime, con­sid­er­ing the gov­ern­ment’s in­tent to align rates un­der GST to the present treat­ment.”

Ac­cord­ing to the ship­ping min­istry, around 95 per cent of In­dia’s trading by vol­ume and 70 per cent by value is moved through mar­itime trans­port. Due to this, do­mes­tic ship­ping firms play a key role in the eco­nomic ac­tiv­ity of the coun­try.

In ship­ping busi­ness, ves­sels are high-value as­sets and the to­tal cash flow re­quire­ment for such ac­qui­si­tions is also high. With an ex­tra tax bur­den of 5 per cent, ac­qui­si­tion would only be­come more ex­pen­sive. Sheth said un­der the new rules, there was dis­crim­i­na­tion be­tween In­dian ship­ping com­pa­nies and for­eign ship­ping com­pa­nies in favour of the lat­ter. Ex­ports or im­ports of cargo ser­vices pro­vided to the In­dian con­signor by an In­dian ship­ping com­pany would be li­able for GST due to the cus­tomer be­ing lo­cated in In­dia. How­ever, the same ser­vice by a for­eign ship­ping com­pany will es­cape tax based on the place of sup­ply pro­vi­sions. This would en­cour­age an In­dian char­terer to en­gage a for­eign ship­ping line over an In­dian ship­ping line since the In­dian ship­ping com­pany would have ad­di­tional 5 per cent GST on its to­tal freight invoice. At present, there is par­ity of tax treat­ment be­tween do­mes­tic and for­eign ship­ping com­pany as there is no tax ap­pli­ca­ble.

“Both im­port and ex­port cargo must be zero-rated to plug this is­sue,” said Sheth. Fur­ther, a 5 per cent duty has also been levied on voy­age char­ters with no in­put tax credit pro­vi­sion. In voy­age char­ters, the ship­ping com­pany han­dles the trans­porta­tion of the cargo while in time char­ters, the com­pany leases the ves­sel to the cargo buyer who car­ries out the trans­porta­tion of the cargo. The do­mes­tic ship­ping in­dus­try has made rep­re­sen­ta­tions to the ship­ping min­istry in this re­gard and the mat­ter is ex­pected to be taken up at the GST Coun­cil meet slated on June 3.

“We have al­ready made a rep­re­sen­ta­tion re­gard­ing these is­sues in GST tax struc­ture to the min­istry,” in­formed an of­fi­cial with the sta­te­owned Ship­ping Cor­po­ra­tion of In­dia . Mean­while, the ship­ping min­istry is hope­ful of get­ting the is­sues set­tled with the fi­nance min­istry.

“With this kind of tax regime for the ship­ping in­dus­try, no new in­vest­ments will come to the sec­tor. The in­dus­try is al­ready in the grip of a dif­fi­cult busi­ness cli­mate. This move (GST tax struc­ture) would be even more dis­cour­ag­ing,” a se­nior ship­ping min­istry of­fi­cial said.

 

Understanding GST provisions for shipping industry of India


Currently, if goods are transported as cargo through ships, outbound shipment is considered exports, whereas inbound shipments attract service tax. If transportation is through air, inbound and outbound shipments are not subject to service tax. Tax liability, connected with ancillary items like warehousing, cargo handling, and terminal charges are determined based on taxability of principal service.

Since GST does not specify exclusion for air compared to ocean freight, transactions, when place of supply is inside taxable territory, would be levied with air and ocean freight charges with respect to GST.

“Thus converting logistics and freight forwarding into a supply of services, which includes movement of goods by sea, inland waterways, air, rail, or road. GST on freight depends on whether transportation is national or international”
- Shashank Dixit, CEO, Deskera, a cloud-based business software provider

Moreover, while considering domestic freight, transportation needs to happen from a place in India to another place in the country. Basically, both points of origin and destination have to be in India. On the contrary, International freight rules are applied when transportation takes place and when either place of origin or place of destination or both are outside India.
So, impact is in provisions of ‘Place of Supply’ to determine taxability of cross-border and within-state transactions. According to GST provisions, Place of Supply for transportation is defined as follows: (a) location of recipient if recipient is GST-registered entity; and (b) if recipient is unregistered entity, place of supply deemed as place where goods are given over for transportation.

It remains to be seen how the shipping and logistics sector adapts to the new changes brought about by the GST. Although there are concerns that the sector might be adversely affected.

Article Source: BW Disrupt and Business-Standard.com

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