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Transit-transhipment Fee Row With India

Charges imposed from this fiscal

Says NBR; foreign ministry sees 1972 protocol no bar to it

Rezaul Karim and Jasim Uddin Khan
The National Board of Revenue yesterday cleared its position to The Daily Star regarding India's demand for a waiver of transit and transhipment fees for Indian cargoes and transports, saying the fees have nothing to do with the Protocol on Inland Water Transit and Trade signed by the two countries in 1972.
India has been claiming that the transit and transhipment fees imposed on its cargoes and transports does not conform to the IWTT protocol.
The Bangladesh NBR officials said the fees were imposed this fiscal year on all foreign cargoes and transports in transit, through issuance of a circular to generate revenue.
Foreign ministry officials also said the protocol does not prohibit Bangladesh from imposing any fee. Leaders of major business chambers of Bangladesh termed the Indian demand irrational.
The issue resurfaced last week when the Indian high commission intensified its efforts to persuade the Bangladesh government to concede to its demand, after two Indian cargo vessels had been denied transit and detained by the Bangladesh customs at Sheikhbaria in Khulna, until those paid the transhipment fees in Bank Guarantees.
"We want to make it clear that the imposed transit and transhipment fees do not conflict with the Protocol on Inland Water Transit and
Trade. The protocol allows India to use Bangladesh territory for transporting goods. The protocol describes how and which route Indian vessels can use. The fee that India has been paying annually under the protocol so far, is paid to the shipping ministry for maintaining river navigability," Member (Customs) of NBR Hussain Ahmed said.
The Bangladesh government fixed Tk 10,000 fee for each cargo container in transit, and Tk 1 ,000 for each ton of bulk goods.
The present government put emphasis on connectivity to enhance regional trade, and to generate 'incremental gain' from that, Hussain Ahmed said.
NBR is now preparing a summary note on the issue for the finance minister, who is scheduled to return home on October 19 from a trip to the US. The minister will inform the prime minister about the matter, as the Indian authorities have approached her as well with the demand for a waiver.
An official of the Bangladesh foreign ministry told The Daily Star, it is true that there is no mention of transit and transhipment fees in the IWTT protocol, but it also does not prohibit imposition of such fees.
The protocol does have a provision for a fee for maintenance of the transit routes. The Indian government paid Tk2 crore annually till 1999 for the purpose. For the existing protocol period, from April 1, 2009 to March 2011, the maintenance fee was increased to Tk4.25 crore.
The protocol was renewed
in March 2009, and on May 31, 2010 an addendum to the protocol was signed to add Ashuganj in Bangladesh, and Silghat in India as new ports of call.
The foreign ministry official said the Indian argument for not paying the transit and transhipment fees is not logical, and the Bangladesh government rightly introduced the fees.
"Neither the 1972 protocol nor any other agreement between the two countries says that Bangladesh can't impose the fees. These types of fees are in existence all over the world, and Bangladesh can't allow any waiver because those will be a source of revenue."
He said the maintenance fee, and transit and transhipment fees are not the same, and Bangladesh is not required to consult India prior to introducing the fees. India should pay the maintenance fee as the transit routes are being maintained primarily for use by Indian transit traffic, he added.
"The government imposed the fees following the addendum to protocol which will allow India to carry huge overdimensional cargoes from Kolkata to Agartala for setting up a power plant in Tripura," he said.
If the waiver is granted to India, then Nepal and Bhutan will also ask for the same, he noted.
Foreign Minister Dipu Moni at a media conference on August 8 also said it is not possible for Bangladesh to waive the fees as those are a source of revenue for the country.