The Hindu Business Line : Coffee Board for import duty cut on equipment — Suggests reduction to 5 pc for roasting, brewing machinery

THE Coffee Board has recommended a sharp cut in Customs duty on roasting and brewing equipment, which when comes into effect could eventually boost domestic consumption.

The Coffee Board Chairman, Mr G.V. Krishna Rau, said the Board had suggested reducing the import duty from the current 34 per cent to about five per cent for a period of five years.

"The current duty structure is quite burdensome and has not helped the roasters to be competitive," Mr Rau said.

The duty structure includes a basic duty of 15 per cent, a countervailing duty of 16 per cent, plus the education cess and surcharges therein.

"The reduction in import duty is mainly being done with an objective of boosting domestic consumption," Mr Rau said.

Explaining the rationale behind the move, Mr Rau said if a roaster got access to upgraded technology, he could produce better quality coffees and position himself in the market vis-à-vis the vendor selling mixed coffees.

This would enhance the availability of quality coffees for the consumer and would trigger consumption, he said.

The roaster community has for some time now been demanding reduction in import duty on coffee equipment.

The relaxed import duty was available to roasters till June this year but has eventually lapsed since then.

"In a bid to make it available for a large section of the roasters for a longer period, we have suggested a five-year duty cut. This is also expected to build a critical mass and may prompt some of the manufacturers of the equipment to set up their units here," he said.

Mr Rau, on Tuesday, held a meeting with the various sections of the trade, including roasters and exporters, to ascertain their views on the policy changes required for the betterment of the industry.

Though few roasters felt there was a need to import green coffee of certain varieties, the volumes did not justify the need for a policy change and a reduction in import duty, Mr Rau said.

However, the Coffee Board had an "open mind on the import issue", Mr Rau said adding, "If the roasters face serious supply side constraints, the Board may look into the issue and suggest appropriate measures".

At present, green coffee imports for domestic consumption are effectively blocked as a 100 per cent duty is levied on them.

This is mainly to protect the domestic growers from undue imports.

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