Demurrage charges - Sigh of Relief for importers

Demurrage charges - Sigh of Relief for importers. March 15, 2019
Good article. However, in the explanation given in 2nd para as to What are demurrage charges? The authors have created confusion by mixing up the two categories of demurrage charges. The theme of article is based on the first type of demurrage charges which are liquidated damages owed by a charterer to a shipowner for the charterer's failure to load or unload cargo by the agreed time.
The second category of demurrage charges which can also be referred to as warehouse charges are levied and collected by the custodians (port authority, custodians of Air cargo complex / ICDs/ CFSs / courier terminal operators appointed under section 45 of the Customs Act) from the importers for handling and storing their cargo. As rightly mentioned by the authors these Demurrage charges are levied in order to ensure quick clearance of the cargo from the harbour and that these charges are always fixed in such a way that they would make it unprofitable for importers to use the port premises as a warehouse. Essentially, these charges are collected post assessment and at the time of delivery of the cargo to the importer.
The article should have limited to the extent of first category of demurrage charges where in charter party contracts, demurrage charges are calculated using the concept of lay time. These charges are payable by a charterer to a ship owner for causing delay beyond the agreed time in loading or unloading of cargo. It is these demurrage charges which Customs insist to be included under the valuation rules to arrive at the assessable value of goods under section 14 of the Customs Act.

VIJAY KUMAR 18/03/2019