Financial Daily from THE HINDU group of publications
Tuesday, Apr 08, 2003
Industry & Economy
Kochi corporation urged to scrap cess on KRL crude
Sajeev Kumar V.
KOCHI, April 7
THE decision of Kochi Corporation to impose a cess on crude oil brought in by Kochi Refineries Ltd (KRL) and pumped through the city from the Kochi port has been objected to by trade and industry.
The objection to this effect was first raised by the port management, which is on the verge of signing an MoU with the refinery to set up a single buoy mooring (SBM) to handle crude oil outside the port waters.
The port Chairman, Dr Jacob Thomas, said that the proposal of the civic authorities would affect the viability of the SBM project itself.
If the corporation goes ahead with the proposals, it would be difficult to handle crude in the SBM at the mutually agreed rates."The move is totally unjustified, unwarranted and detrimental to the State," he said.
Moreover, there is every possibility of KRL backing out from the project considering the financial viability, he added.
According to Mr Thomas, the corporation should desist from the move taking into consideration various development-oriented projects undertaken by the refinery for the benefit of the entire city.
In its Budget proposals, the corporation had decided to implement a cess of one paisa per litre of crude oil brought in by KRL through its pipelines in the city.
The proposed cess amounts, in effect, to an additional wharfage of about Rs 11 per tonne on crude. The Cochin Chamber of Commerce and Industry has also come out against the move on account of the long-standing membership of the refinery with the Chamber.
The Chamber Vice-President, Mr N.R. Pai, said that the levy was "totally unjustified and could have serious repercussions on a well-run industrial unit in Kerala." The levy, which will affect only a single industrial unit, is unfair and discriminatory, he added.
``We are in an era where trade barriers in the form of entry tax, cess, octroi etc, are disappearing. Other States and corporations are removing these barriers in order to encourage trade. What the city should be doing is create an environment for the industry to prosper and derive the benefit of such development rather than stifle industrial growth by such artificial restrictions.''
KRL is faced with a situation where large sums of money are outstanding on account of sales made to the State Government and other PSUs.
Any further burden would affect the financial well-being of this currently healthy organisation, Mr Pai said.
Moreover, the burden would ultimately fall on the consumer as the transportation prices of petrol, diesel, LPG and kerosene would go up.
When the State is making every effort to attract investments after the Global Investors' Meet, it will be most unfortunate if existing industry is put to unnecessary difficulties.
The Chamber, therefore, sought the intervention of the Chief Minister to take immediate steps so as to ensure that the move to impose the cess is withdrawn.
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