Union Minister for Shipping, Road Transport and Highways Nitin Gadkari on Thursday said he had recommended a tourism industry proposal on a five-year Goods and Service Tax (GST) exemption for the cruise shipping industry to the Finance Ministry.
During an interactive session organised by the Mumbai Port Trust with the travel trade on promotion and development of cruise tourism in India, Mr. Gadkari, in repsonse to suggestions from the travel industry that a GST holiday be granted, said, “GST and customs are not in our hands. It is a subject of the Finance Ministry. While I have already recommended it on the basis of a letter by the tourism ministry, it is ultimately not the government but the GST Council which has to take a call.”
Mr. Gadkari suggested the travel industry also independently write to Finance Minister Piyush Goyal and Maharashtra Finance Minister Sudhir Mungantiwar, who is a member of the GST Council, seeking an exemption. “We have moved much ahead and are all set to launch domestic cruise shipping in a big way. Cruise between Mumbai and Goa will become a reality in October,” the minister said.
The minister also announced that the government will be giving ₹500 crore to the Shipping Corporation of India to purchase ships in the international market and lease it out domestically.
“We will be giving ₹500 crore to the SCI under the Sagarmala programme to purchase vessels which are available for cheap due to a slump in international market,” he said.
Mr. Gadkari said the state-run SCI will lease out the assets to private parties who may have difficulties arranging the capital but can deploy the assets locally for productive uses.
“The ships can be used either for cruise tourism, roll-on-roll-off services which entail ferrying cars through the sea route and also ro-pax, where a car carrying passengers is ferried in a boat,” he said.
Highlighting specific measures taken by the government for promotion of cruise tourism, Mr. Gadkari said, “We have removed uncertainties in berthing of cruise ships vis-a-vis cargo ships and given them the comfort of operation in the country.” In an attempt to reduce overall cost, the government has also done away with certain charges that will make it attractive.
Sanjay Bhatia, chairman of the Mumbai Port Trust, said, “The Government of India has formed a task force of the Ministry of Tourism and Ministry of Shipping. So they have appointed an international consultant who has given a roadmap on how to develop cruise tourism in the country. The main part of that is that the ease of doing business, immigration system, carrier security fee system, customs and port regulations need to improve. The second is marketing of cruise tourism, the third is general port infrastructure.”
With the government terming cruise tourism development as a project of national importance, it may attract up to 700 vessels from its present strength of 70 vessels a year. To start with, the government is focussing on five ports: Mumbai, Goa, Mangalore, Chennai and Kochi, to be developed as cruise hubs.
According to the cruise tourism roadmap prepared by M/s. Bermelo & Ajamil and Ernst & Young, close to 4 million passengers are expected to visit India in the coming years, and 3 million passengers are expected to take cruises from Mumbai Port.
