Exporters, importers cry foul over new gazette
Causing much distress to exporters and importers the government has gone ahead with the imposition of new additional charges on freight costs and providing sweeping powers to the Minister to impose these charges at a time when industries are facing a major crisis, exporters and importers said.
This will reduce the competitiveness of Sri Lankan exports and at the same time bring about a direct negative impact on the country’s revenue, foreign exchange earnings and on the cost of living. This is due to the fact that the additional costs considered as landed costs would be high and will be directly passed onto the consumer.
By nullifying the amendment to the Gazette No. 2041/10 dated October 17, 2017 under the Licensing of Shipping Agents, Freight Forwarders, Non –Vessel Operating Common Carriers and Container Operators Act No. 10 of 1972 the Minister has introduced a new charge on importers and exporters by service providers and fixed such cost called cost recovery fee at US$8 per CBM (cubic metre); and fixed a maximum deliver order fee by himself with provision to review later. This new charge has been imposed through gazette No2304/24 of October 18, 2022.
This has come in for strong opposition by exporters and importers who point out that the government has no authority to say what price to charge and considers the new gazette as totally “uncalled for.”
Under the previous regulations amended in 2017 it allowed the Director General of Merchant Shipping (DGMS) to monitor
and control the maximum amounts charged as Delivery Order (DO) Fees.
Since 2017 this system has worked satisfactorily and both importers and exporters saw the benefits of reduced costs. These reduced costs on imports were then passed on to the Sri Lankan consumer. Contrary to arguments put forward at the time, there was no withdrawal of liners from Sri Lanka and in fact the SLPA has recorded continuous growth in volumes and has currently reached a landmark 7.5 million TEUs.
However according to gazette No.2304/24 of October 18, 2022 the Minister has fixed a maximum DO fee. This additional charge will result in increased costs to exporters and importers.
Moreover, on January 5 the Minister, realizing he does not have the authority to set these charges, then tabled in Parliament a supplement to amend the Licensing Act of 1972 to give himself the authority to set the DO and other fees. The previous gazette ensured that service providers obtain approval from the DGMS to do so, exporters said.
This will give sweeping powers to the Minister to fix charges and in fact, the exporters pointed out that in the absence of equal bargaining power the weaker party can be crushed by the stronger party if they win the confidence of the Minister.
The gazette cancellation has been carried out without consulting the industry and those in the apparel industry pointed out that while factories are already facing a crisis with low orders volumes and trying to retain staff by providing work on about four or five days a week these moves will only aggravate the current crisis.
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