The Hindu Business Line : Vanaspati import quota period extended

THE Government has given a further three-month reprieve for utilisation of the zero-duty one-lakh-tonne (lt) annual vanaspati import quota from Nepal for 2003-04.

Simultaneously, it has made it clear that the State Trade Corporation (STC), which is the sole agency appointed to import the quota, will have to undertake the imports by itself and not through third parties.

Under the Indo-Nepal Treaty of Trade, the Government allows duty-free import of up to one lt of vanaspati a year. Imports beyond this quota attract the normal Most Favoured Nation (MFN) duty, currently 20 per cent.

For the purposes of quota entitlement, the annual time period extends from March 6 of a particular calendar year to March 5 of the succeeding year. Further, the unutilised quota for a year cannot be carried forward to the subsequent year.

By this reckoning, the current (2003-04) quota year that began on March 6, 2003, would have ordinarily lapsed on March 5, 2004. But in mid-February, the Commerce Ministry allowed the zero-duty quota entitlement for 2003-04 for a further three months up to June 5, 2004. Now, even this date has been extended for an additional three months ending September 5, 2004.

"The time period for import of vegetable fats (vanaspati) from Nepal for the year 2003-04 shall be extended up to September 5, 2004, and the unutilised quota shall not lapse till this date. The annual quota of 100,000 mt of vegetable fats for the financial year 2004-05 from Nepal shall be permitted for import from September 6, 2004, to March 5, 2005, and thereafter no imports shall be allowed," the Directorate General of Foreign Trade (DGFT) said in a public notice issued on June 23.

However, it is a subsequent notice issued the very next day that industry sources say is more significant. The June 23 notice had stated: "STC shall be the sole agency to monitor the import of vegetable fats from Nepal." But in the June 24 notice, the DGFT has "corrected" this to read as the "STC shall be the sole agency to make imports of vegetable fats up to the indicated quantity on annual quota basis."

The sources pointed that the clarification was in line with the order recently passed by a Calcutta High Court Bench restraining the STC from importing vanaspati from Nepal through third parties. As a matter of fact, the Court had even directed the STC to pay the regular MFN duty of 20 per cent on the imports made through third parties, which it said cannot be eligible for the duty exemption under the Indo-Nepal Treaty of Trade.

At the same time, as a concession to the Nepalese industry, the Government has permitted time till September 5 for exhausting the one-lt zero-duty quota fixed for 2003-04. This is in addition to a fresh one-lt quota entitlement for the current year, which will be accounted from September 6, 2003, to March 5, 2004.

Vanaspati currently sells at around Rs 725 per 15-kg tin in the Delhi market, which is about Rs 48,000 per tonne. Import of one lakh tonnes at zero duty would, thus, translate into a business of about Rs 480 crore.

More Stories on : Oilseeds & Edible Oil | Exports & Imports

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
MCX ties up with info service agencies

CanBank stress on farm credit

IMD predicts normal rainfall in July — Lull to end by Sunday; repeat of 2002 ruled out

Dry spell leaves farmers worried

Demand for rubber up as rains intensify

SBT loan for rainwater harvesting

Plea to exempt refined rice bran oil from excise duty

Vanaspati import quota period extended

Exclude edible oils from free trade pacts: COOIT

Pepper rules steady