The Hindu : Front Page : Cess on farm exports to go

Online edition of India's National Newspaper
Saturday, Apr 09, 2005

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Front Page

Cess on farm exports to go

By Sushma Ramchandran

NEW DELHI, APRIL 8. The Government today announced the setting up of an Inter-State Trade Council as part of measures to boost exports, especially in the key areas of agro-products, marine products, and handlooms. In a supplement to the five-year foreign trade policy (2004-9), numerous steps to cut red-tapism have been unveiled, especially in the export promotion capital goods (EPCG) and advance licensing schemes. These are expected to benefit the small-scale units and the retail sector while reducing the congestion in ports.

The Commerce Minister, Kamal Nath, outlining the new policy initiatives at a press meet, said an unprecedented 24 per cent export growth rate in 2004-2005 forced him to revise the target for the current year from $88 billion to $92 billion. Quick estimates for 2004-2005 showed that total exports reached $80 billion, against the target of $74 billion. With even higher imports, the trade deficit had reached $25 billion. He felt this was largely due to the high cost of oil imports.

"Avoid taxing exports"

The Minister, stressing the need to avoid taxing exports, said the cess on export of all agricultural and plantation commodities, under the various Commodity Board Acts, were proposed to be abolished. Consultations would be held with other Ministries which might be levying cess on exports, with a view to eliminating them. "We cannot subsidise our exports but let us at least not tax them."

Launching a special package for the marine products sector, he said this was meant to help the fishermen affected by tsunami. It includes allowing import of mono-filament long line system for tuna fishing at a concessional duty of five per cent and allowing duty-free import of special flavours and ingredients for seafood processing up to one per cent of the value of exports. The system of waste disposal of seafood only after Customs inspection is being replaced by a self-removal procedure for waste clearance.

The Minister said the "Vishesh Krishi Upaj Yojana" would be extended to poultry and dairy products, apart from flowers, fruits, vegetables and minor forest produce. The Shellac export promotion council had also been made the nodal agencyl for minor forest produce while a special handloom trademark would be developed on the lines of Woolmark and Silkmark.

New scheme

As for the duty entitlement pass-book (DEPB) scheme, he said a scheme to replace it had been finalised and it would in place within six months. The Minister conceded the exporters' demand for a transitional period to shift to the new scheme.

Under the "EPCG package," fast track companies fulfilling 75 per cent of their export obligation in half the time, would be freed from the balance obligation. This is expected to benefit the pharmaceutical sector significantly. Concessional duty benefits have also been given to the retail sector as well as for capacity expansion and quality upgrading of small-scale units. The EPCG scheme had been extended to minor ports, inland container depots and the container freight stations in order to augment port facilities.

Mr. Kamal Nath was confident that the proposed Inter-State Trade Council would improve the coordination between the States and the Centre with regard to trade. Some States had formulated export policies but a great deal was needed to coordinate these efforts. The advance licensing scheme had also been rationalised with three different categories being merged.

Highlights

Export cess on agri products and plantations to be removed.

Export obligation reduced for SSIs, farm sector.

EPCG benefit for retailers.

Annual advance licence for all exporters.

`Served from India' scheme made flexible.

Debonding procedure for EOUs simplified.

Modernisation package for marine exporters.

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