~

Trincomallee Port handles Panamax ships to discharge Clinker : Suspected fowl play in taxation declaration : Are foreign ships givens Sri Lankan Flag of convenience for Coastal trade

(Lanka-e-News- 12.Aug.2015, 6.30PM) In Sri Lanka cement is considered an essential item. In a developing country such as ours Sri Lanka consumption against per person is very much in the low end compared to many countries in South east asia.  Certainly price of Cement being very high has largely attributed to low consumption of cement where construction is much dependent on alternative such as steel,  glass etc..

Sri Lanka produces its own cement about 25% of its cement and while the balance 75% of local demand is imported via Clinker and/or Bulk and Bagged Cement imports.

In a bid to be competitive and sustainable, In Trinco Clinker is now imported in Panamax ships and clinker is transferred to small ships in mid anchorage and transferred to other port/s for cost benefit. Ship to ship operation is now practice in a bid to reduce cost importing raw materials using foreign ships flagged in Sri Lanka for coastal trading benefits. However there lies some detrimental allegation that Revenue liable to be paid to the government has been avoided by virtue of this questionable operation.  Sri Lanka government losses import taxes running into several millions each shipment. This may be a little loop hole in the laws where flagging in conveniently accommodated where as the ship owners do not pay any taxes on income not collect VAT for domestic transport as a tax liability.

In our neighbouring country India such foreign owned vessels trading coastal operations is learnt to have regulated to pay local taxes on it oils consumable etc to compensate unfair trading practices.

Sri Lankan authorities should investigate such a move and curtail Sri Lanka exposure into these malpractices and make laws that suit the trade. It is questionable while one company is importing Clinker FOB at USD 45.00 a Ton the other company is importing Clinker from Vietnam delivered to Trincomallee at USD 45.70 a ton which is a very unlikely theory/declaration.

The merger of the worlds Two cement giants Holcim and Lafarge have made it one of the most biggest merger in worlds merging history. It is expected the Two giants will merge in Sri Lanka as well to make the biggest conglomerate in Sri Lanka then again. The Two organization would probably boast a good 80% capacity of the Sri Lankan annual market share. While one would question the dominance there are no laws to administer laws on fairplay competition. General in developed countries laws are very stringent to any market share capability above a threshold 50%.

Having said that, Sri Lanka government should look at more cost effective measures to cement market players to make the industry more viable and cost effective where consumers have more buying power and access to cement in order to expedite development in Sri Lanka. In the World cement price have reduced by about 20% and Sri Lanka we do not see such benefits passed to the end users. Ideally Cement should be sold at less than Rs 700 a bag including VAT and should look at improvements and infrastructure to reduce cement further in the coming years as the cost of living needs to be curtailed to be competitive.

 
Please see the proof in photogaraphs

---------------------------
by     (2015-08-12 13:10:09)

We are unable to continue LeN without your kind donation.

Leave a Reply

  0 discussion on this news

News Categories

    Corruption

    Defence News

    Economy

    Ethnic Issue in Sri Lanka

    Features

    Fine Art

    General News

    Media Suppression

    more

Links