The Customs Commissionerate of Ludhiana has kept in abeyance a controversial order issued before a set of three holidays, which allegedly led to the piling up of several containers of Basmati rice booked for shipment to West Asian countries.

A public notice (no. 04/2024) issued January 31, and signed by the Commissioner, Vrindaba Laxmansinh Gohil, said: “It has been decided to seek clarification in the matter from the CBIC, New Delhi and till clarification is received, the Public Notice dated January 25, 2024 may be kept in abeyance.”

The Customs Commissionerate has received representations on the notice, regarding the levy of export duty on ‘Parboiled Basmati Rice’.

Necessary instructions have been issued to the (inland) port officers for trade facilitation, and all stakeholders have been told to bring to the department’s notice any difficulties they may face.

The agri export promotion body APEDA had intervened to resolve the issue after the goof-up at the inland container deport (ICD), Ludhiana, which led to 30-40 containers of Basmati rice getting stuck for a few days.

25 containers tested

According to the Customs Commissionerate’s January 25 notice, export of rice consignments of all varieties were subjected to ‘Sampling and Testing’ before grant of LET Export Order. Its ground officers were asked to ensure that samples are drawn and test reports are obtained within 48 hours from the Customs House Laboratory.

But exporters could not get the testing done given the three holidays. As a result, containers got piled up, even though testing was not required. The Punjab Rice Millers Exporters’ Association took up the matter with APEDA which, in turn, scontacted the Customs authority and explained the correct position.

“For more than two decades, Basmati rice, whether raw or parboiled, has been exported under HS Code 10063020 until this public notice was issued. When Customs suddenly opts for another HS Code for parboiled Basmati rice, it is questioning all the clearances made prior to issuance of the January 25 public notice. Changing and creating HS code, in general, is a policy proposal, and should not be tinkered with,” said S Chandrasekaran, a foreign trade policy expert.

Industry leaders said as much as 80 per cent of India’s Basmati exports is shipped to West Asia, and 90 per cent of this is in parboiled form. While Punjab mainly exports Basmati rice through Kandla and Mundra ports, Vishakhapatnam port is preferred for shipment of non-Basmati rice.

The government has levied 20 per cent export duty on parboiled non-Basmati rice and not on parboiled Basmati rice, an exporter explained, referring to the DGFT notification.