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Shri Kamal Nath, Union Minister of Commerce and Industry, has said that the removal of the cess on exports will enhance the global competitiveness of India’s agricultural exports. Almost Rs.100 crore worth of cess presently levied on export of several agricultural products under different enactments is proposed to be abolished and a Bill to this effect was introduced in Parliament by Shri Kamal Nath yesterday.
The Cabinet recently approved abolition of cess on exports of agricultural products either through repealing of the concerned Cess Acts or through suitable amendments to the concerned Acts. The cess is levied on different agricultural products under the following Acts:
1. Agricultural Produce Cess Act 1940
2. Produce Cess Act 1966
3. Agricultural & Processed Food Products Export Development Authority (APEDA) Cess Act 1985
4. Tobacco Cess Act 1975
5. Spices Cess Act 1986
6. Marine Products Export Development Authority (MPEDA) Act 1975
7. Coffee Act 1952
In recent years, international trade in agricultural goods has become extremely challenging for India with the emergence of new competitors. Some of these competitors have a negligible domestic demand and can export almost their entire produce at very cheap rates, thus displacing the conventional demand for Indian products in the international market. From a policy perspective, the Ministry of Commerce & Industry has also taken the consistent stand that taxes and duties ought not to be exported. The cess levied under all the Acts referred to above is unambiguously an export tax, which reduces competitiveness of agricultural exports and is not justified. Further, this is especially significant in the global context today where many developed countries provide huge subsidies to support their domestic agriculture.
SB/MRS
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