The Hindu : Tamil Nadu / Chennai News : Amendment to abolish export cess on agricultural items

Online edition of India's National Newspaper
Sunday, Jul 31, 2005

Tamil Nadu

Tamil Nadu - Chennai

Amendment to abolish export cess on agricultural items

Staff Reporter

The draft has been cleared by the Union Cabinet

OPEN HOUSE: K.T. Chacko, Director- General of Foreign Trade and A. Sakthivel, Chairman, Federation of Indian Export Organisations (FIEO), southern region at a meet organised by FIEO in Chennai on Saturday. — Photo: Shaju John

CHENNAI: : A draft amendment prepared by the Department of Commerce to abolish export cess on several agricultural and plantation items is ready for being placed before Parliament.

The amendment, if passed, will remove cess on items such as coffee, tobacco, spices and marine products covered by the commodities boards. However, abolition of the cess on other commodities needs legislative changes to be mooted by the Union Ministries of Textile and Agriculture, according to K.T. Chacko, Director-General of Foreign Trade (DGFT).

Addressing an open house on foreign trade policy, organised here on Saturday by the Federation of Indian Export Organisations (FIEO), southern region, he said the other Ministries concerned had been asked to introduce the amendments on a fast track basis. The Union Cabinet had approved the draft. According to the agenda of the open house, while releasing the annual supplement to the Foreign Trade Policy, the Commerce Minister had proposed removal of cess on export of all agricultural and plantation commodities. "However, a notification is still to be issued." On the demand for withdrawal of a norm relating to the Advance Licence Scheme, Mr. Chacko said exporters were required to maintain a register of the imports and their use in the goods they exported. However, most of the exporters did not maintain a register. The United States and the United Kingdom were insisting on compliance with this stipulation. The DGFT would consider allowing such authentication by chartered accountants. P.K. Mohanty, Joint Secretary (drawbacks), Ministry of Finance, highlighted the initiatives to simplify the Customs procedures.

A. Sakthivel, chairman, FIEO southern region, said the Centre had to pay more attention to labour reforms and cutting transaction cost. It should strive for involvement of States in enhancing exports and exempt exports from service tax. The apparel industry could provide 250 days of employment a year to every person if contract labour was allowed and working hours were increased from 48 to 60 hours a week. Seeking income tax sops for industrial units exporting 70 per cent of their production, he said exemption from service tax, fringe benefit tax and input stage value-added tax would help to boost exports.

The export target for this fiscal was $92 billion. The achievement in the first quarter of 2005-06 was $20.9 billion, 20 per cent higher than the export in the corresponding period last year, he said.

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