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Center extends re-importation deadline to relieve exporters

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This step is expected to reduce the export of empty containers from the country due to the imposition of import duties, thereby increasing the availability of containers for trade.

The central government on Saturday eased standards for exporters facing a global container shortage. The Central Council for Indirect Taxes and Customs (CBIC) issued a circular which allowed three additional months for the re-export of imported vessels in domestic ports.

“This step is expected to reduce the export of empty containers from the country due to the imposition of import duties, thereby increasing the availability of containers for trade,” the government notification said.

Currently, duty-free imports of containers are allowed on condition that they are re-exported within the next six months. However, keeping containers beyond six months is considered importation and therefore import duties are levied, a policy aimed at ensuring faster turnaround of containers.

To avoid such import duties, shipping companies export empty containers to evade payment of duties on empty containers. But, such practices exacerbate the problem of shortage of containers for exports.

Thus, the CBIC granted the relief as a “temporary measure” to improve the containers currently available for the export of containerized goods. The decision was made due to the disruption caused by the coronavirus disease (Covid-19) pandemic, which has resulted in high sea freight rates and a shortage of containers around the world.

The problem has also been repeatedly reported by exporters in India.

“The CBIC has issued a directive to field offices to extend this three-month period when the container is taken out of the country on a loaded condition, provided that the six-month period falls before the end of fiscal 22,” said the CBIC.

This step is expected to reduce the export of empty containers from the country due to the imposition of import duties, thereby increasing the availability of containers for trade.

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