Agri Business

Kerala HC stays ₹500 a kg floor prices for pepper import

K.C.Gopakumar | | Updated on: Dec 08, 2021
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Earlier, as per DGFT order, the pepper import of CIF value of ₹500 per kg and above was free.

The Kerala High Court has stayed the order of the Director-General of Foreign Trade((DGFT) fixing the minimum import price(MIP) of pepper at CIF (cost, insurance, freight) value of ₹500 per kg.

The order was passed on a writ petition filed by Travancore Solvents and Oils, Aluva, a firm engaged in trading spices namely black pepper, cloves, and areca nuts. As per the order issued by the DGFT, pepper import of CIF (cost, insurance, freight) value of ₹500 per kg and above was free.

However, this MIP would not be applicable for imports under the advance authorization scheme, imports by 100 per cent Export Oriented Units and units in the Special Economic Zone. It also has exempted the import of pepper under the Advance Authorisation Scheme for extraction of oleoresin or re-export by the manufacturer-exporters from MIP.

The petitioner pointed out that it was discriminatory as the importers like him could not import pepper, and it was made free for those importers under the Advance Authorisation Scheme.

In fact, it was akin to a policy decision, and the DGFT had no power to amend a policy of the Centre. As per Section 6(2) of the Foreign Trade (Development and Regulation) Act, the DGFT had the power to advise the Central Government and not issue any order like the present one.

The petitioner also contended that the value of import/export of goods should only be negotiated between the parties and the same would not be fixed by any other authority concerned. The DGFT had acted in derogation of provisions of the Customs Act by issuing such an order.

The petitioner pointed out that domestic pepper production in Kerala had declined after the floods between 2018 and 2019. To meet domestic consumption, the country needs to import pepper. The petition added that the condition imposed 6 per cent Piperine content in the imported pepper was also highly irregular.

Published on December 08, 2021

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