India’s desiccated coconut (DC) powder manufacturers can heave a sigh of relief as cheaper imports from Sri Lanka have now come under the scrutiny of the Centre.

On October 4, businessline published a report “Sri Lankan imports hit domestic desiccated coconut powder sector”, highlighting the plight of domestic DC powder manufacturers on such imports at ₹80-90 per kg against the domestic price of ₹110, thereby hitting the domestic industry badly.

DC powder is used as an ingredient in savoury and sweet recipes to provide the flavour of coconut.

The Joint Commissioner of Customs (Special Intelligence and Investigation Branch), Chennai, in its order and based on the representation from Coconut Development Board, has directed the Development Commissioner, Madras Export Processing Zone, to alert improper importation of DC powder and all such consignments for further probe.

It was stated in the directive that certain importers were importing DC powder having oil content above 35 per cent by misdeclaring it as de-fatted coconut and paying no basic customs duty (BCD) by claiming ISFTA benefits. However, these goods are rightly classified under BCD at 70 per cent and at a minimum import price of ₹150 per kg.

Applicable duty

Desiccated coconut is in the form of powder, flakes, chips, shreds etc. It was also noticed that the oil content percentage indicated in the analysis certificate by the importers was below 35 per cent. However, the testing of samples at CRCL Lab, Customs House, Chennai, revealed that the oil content was reported at 45.2 per cent. Hence the goods would attract BCD at 70 per cent or 8 per cent with SAFTA benefits, the order said.

Hailing the Customs’ move, VA Dakshinamurthy, vice-president, Federation of Indian Desiccated Coconut Manufacturers, said DC powder imports from Sri Lanka have been stopped and the domestic manufacturers are getting a reasonable price of around ₹130 kg. The domestic price had declined to ₹110 in October and the uninterrupted imports have hit many small and medium industries, which are highly labour oriented.

To circumvent the MIP of ₹150, he said that imports are made under cattle feed category where the duty is 8 per cent under SAFTA and nil under ISFTA. He added that Sri Lankan DC powder has low fat as the milk and oil is removed from the coconut, while the domestic product has high fat content.

The Coconut Development Board in its representation said the imported product is being used as an adulterant in high quality DC, which is hampering the quality of the product and affecting the domestic industry. The importers could sell DC at very low cost, which is impacting domestic producers. The Board also urged not to permit imports if it does not satisfy the quality standards and to carry out strict scrutiny of imported samples.

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