The Karnataka Cashew Manufacturers’ Association (KCMA) has urged the Central Board of Indirect Taxes and Customs (CBIC) to stop the reassessment of raw cashew consignments imported through New Mangalore Port.

In a letter to PK Das, CBIC Chairman, dated October 29, Subraya Pai, KCMA president, said this procedure is adopted only for imports through New Mangalore Port. In all other ports, the declared value is accepted by and large, the letter said.

Pai said the Customs Department in Mangaluru is claiming that this action is being taken on the basis of its scrutiny of the data available in the National Import Data Base (NIDB) and that the department is within its rights to reassess the consignments imported.

“Though we are not disputing their power to reassess, we are raising our concern on the intent of this move and the arbitrary manner in which it is done,” he said, adding that the department is adding back almost 25-40 per cent of the declared value.

Referring to the data on such reassessments, which was obtained under the RTI Act, he said 88 per cent of the bills of entry that were filed and cleared through the risk management system (RMS) were recalled and reassessed in Mangaluru in July alone. The RTI application seeking this data for August and September was rejected, he said.

There is a total disregard for all importers, including the AEOs (authorised economic operators). The RMS system, too, is totally disregarded. As a result, the time taken to clear the consignment has increased from seven days to 21 days, he said. Cashew importers in Mangaluru have so far filed over 7,000 bills of entries for their imports since January. Of them, over 6,300 have been re-assessed. However, only about 300 ‘speaking orders’ have been passed so far, he said.

K Prakash Rao, former president of KCMA, told BusinessLine that a ‘speaking order’ gives the reason for reassessment. In a ‘speaking order’, the department should clearly say why it is reassessing anybody’s consignment, he said. Not passing a clear order for others, whose consignments have been reassessed, will result in not providing an opportunity for the importer to appeal on these actions, Rao said.

Pai said in the letter that for every 100 tonnes of raw cashew nuts imported, the industry is forced to pay an additional IGST of almost ₹1.5 lakh and around ₹50,000 by way of additional duty where applicable.

The Centre’s ‘ease of doing business’ initiatives are negated by the Customs Department, he added.

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