The Hindu Business Line : Groundnut exporters upset over double levy collection

Groundnut exporters are aggrieved that they have been taxed twice. Customs authorities had collected cess on groundnut exports, one under the Produce Cess Act and again under APEDA Act.

Interestingly, the levy of cess twice continued even after the Government (Department of Revenue) clarified as far back as January 7, 2000 that the export item should bear the charge of cess only once.

The value of cess collected without the sanction of law is estimated at Rs 15 crore based on exports of last six fiscal years. Exporters asserted that in addition to refund of the principal amount, they would claim interest too. A group of exporters is expected to soon approach the High Court of Gujarat.

Under the Produce Cess Act, for various agri-commodities a tariff value is specified and cess at 0.5 per cent on the tariff value is charged. Collection of cess is by the Customs authorities who process export documents. Groundnut kernel export attracts 0.5 per cent cess.

Under the APEDA Act, there is a levy of 0.5 per cent on the value of export. Groundnuts and peanuts are scheduled products under APEDA Act.

Exporters have complained that Customs officials at some ports continued to collect cess twice (under both the Acts) in disregard of the Revenue Department's clarification nearly 6 years ago.

Agricultural Produce Cess Act, 1940 was repealed with effect from September 25, 2006.

Cess under the Agricultural and Processed Food Products Exports Cess Act, 1985 continues.

The Indian Oilseeds & Produce Exporters Association (IOPEA) has made representations to various ministries on the issue of double levy.

The repealed Agricultural Produce Cess Act of 2006 states that "in the present national and international context, it is bad economics to tax exports. From a national perspective, agricultural exports are being seen as a means to augment farm incomes".

Some alert exporters, after realising the error on part of the customs officials filed a refund application with the Customs refund section; but the application was rejected as `time barred' without going into the merits of the case. Customs Act specifies that refund claims must be lodged within 6 months of date of payment.

The exporters have no option but to take legal recourse in the High Court having jurisdiction to try the matter for refund of the cess collected unduly, according to a trader.

A case (Gujarat Ambuja Exports Ltd. versus Union of India) is already pending before the High Court of Gujarat.

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

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