The Hindu Business Line : Kerala flour mills seek zero customs duty on wheat imports

Roller flour mills in Kerala have urged the Centre to allow import of wheat at zero customs duty, while seeking abolition of 4 per cent value added tax (VAT) on the foodgrain.

The Kerala Roller Flour Mills Association Chairman, Mr P.V. Chandran, said in a statement that the Centre would have to relax various levies on wheat since the viabilities of the flour units in the State were under threat due to rising wheat prices.

Wheat Imports

"A majority of the 42 flour mills in Kerala are facing threat of closure. On the one hand, wheat prices are ruling at around Rs 1,000 a quintal in New Delhi. On the other, railway freight charges are rising. We totally depend on the open markets in the North for our wheat requirement and our problems have been compounded by non-availability of stocks," Mr Chandran said in a statement.

Currently, the Centre allows the private trade to import wheat at a concessional customs duty of 5.2 per cent. This is valid only till December 31. Already, flour mills in Tamil Nadu have urged the Centre to allow wheat imports by private trade at zero duty.

The Centre decided to import wheat in February as its buffer stocks began to dwindle and this year's wheat production was hit by indifferent weather conditions.

Initially, it allowed the State Trading Corporation to import at zero duty for building up the buffer stocks. Wheat production this year is estimated at 69.48 million tonnes, down from the initial projections of 75.5 million tonnes.

On Wednesday, wheat (dara) ruled at Rs 970/972 a quintal. According to Mr Chandran, the Centre should also allocate 20,000 tonnes of wheat from the stocks of the Food Corporation of India (FCI) to meet the current raw material shortage.

FCI could make wheat available under the Open Market Sale Scheme until March 31 next, he said. A delegation of the association, led by its President, Mr P.K. Ahammed, would soon meet officials at the Centre, he said.

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