Home / CPD in the Media / Dr Debapriya Bhattacharya on transit facilities

Dr Debapriya Bhattacharya on transit facilities

Published in New Age on Wednesday, 19 August 2015.

Dhaka halves transit, transshipment fees

Shakhawat Hossain

The revenue board has changed its previous position on the proposed levy on Indian goods by nearly halving the rate at at Tk 580 per tonne of Indian good for passing through the country’s territory.

Shipping ministry officials told New Age that the revenue board had also suggested for mandatory bank guarantee, equal to the value of the Indian goods, in addition to the levy for allowing transit or transshipment facility.

Seeking bank guarantee has been proposed in line with the World Customs Organisation and the United Nations Conference on Trade and Development, they said.

Actions could be taken under the Customs Act of 1969, if any differences were found in declaration of goods.

The present proposals which were placed at a meeting of the shipping ministry on August 14 are different from the tariff proposals made by the same board almost five years ago.

The fee was fixed at Tk 10,000 per Twenty Feet Equivalent Unit container if the cargo is transported by road or rail and Tk 1,000 per tonne of cargo if transported by covered vans or trucks, or in bulk, by non-container ships and trains.

The revenue board had issued an SRO titled the ‘Rules for Customs Management of Commodities in Transhipment and Transit 2010’ on the basis of a report by Tariff Commission.

However, prime minister Sheikh Hasina’s economic adviser Mashiur Rahman opposed imposition of transit fees in line with the suggestions of the Tariff Commission committee.

The revenue board was forced to withdraw the SRO after strong persuasion from the Indian side.

Shipping secretary Shafique Alam Mehedi said ‘the government wanted to fix the levy afresh.’

He said a technical committee headed by an additional secretary of the shipping ministry was now examining the proposals.

Quoting a directive by the Prime Minister Sheikh Hasina he said they would protect the interest of the country while finalising the levy.

On Sunday the shipping ministry asked roads and highways division, railway ministry, bridge division, environment and forest ministry, DG Shipping and BIWTA to send their proposals on tariff in the next seven working days.

Mehedi expected the scrutiny would be completed in this month.

He said a secretary-level meeting between Bangladesh and India was expected to be held next week either in Dhaka or

Delhi to make further progress on the Protocol on Inland Water Transit and Trade.

New Delhi renewed pressure on Dhaka for the transit facility during Indian prime minister Nerenda Modi’s visit in the capital in May.

India has long pressing for transit and transshipment facilities through Bangladesh to establish easier communication with its northeastern states.

Dhaka has already allowed transhipment facility to Delhi on a number of occasions on humanitarian grounds to transport food-grains and over-dimensional cargoes for power plants in its north-eastern states.

Delhi always responded in a lukewarm manner the past whenever the issue of duty and tariff against the transit and transshipment came up.

But unlike previous occasions, Delhi has agreed to give tariff as per rules of the World Trade Organisation, said finance minister AMA Muhiuth.

He said the WTO rules stipulated transit fees analysing the cost of infrastructure and fees fixed by the transit-giving country.

Economist Debapriya Bhattacharya said there was no precedence of a country compelling another country to provide transit facility through WTO Dispute Settlement Panel to secure the service.

The lone case of Colombia-Panama was more about enlarging the points of entry, he said.

Incidentally, Article V does not provide an explicit definition of the term ‘freedom of transit’, although it appears trans-shipment comes under its purview, added the former ambassador of Bangladesh to the WTO and currently a distinguished fellow at the Centre for Policy Dialogue.

He said it would be difficult for Bangladesh to protect its interests if it selectively referred to WTO provisions on freedom of transit without full understanding of the fees that a country should charge to cover the costs of providing the transitfacility.


Check Also

Press Reports on State of the Bangladesh Economy in FY2017-18 (First Reading)

Centre for Policy Dialogue (CPD) organised a media briefing on the release of the State of the Bangladesh Economy in FY2017-18 (First Reading) on 13 January 2018 in Dhaka.

Leave a Reply

Your email address will not be published. Required fields are marked *