Indian industry asks to strike off cess on imported rubber

Wednesday, 28 May 2014 00:00 - - {{hitsCtrl.values.hits}}

KOCHI: Rubber industries have asked for immediate discontinuation of cess on imported rubber citing that there is no law which authorises the Customs Department to levy rubber cess. According to the All India Rubber Industries Association (AIRIA), the cess can be levied only on rubber produced in the country under the Rubber Act and excludes imported rubber from the purview of the Act. No such notification as to the levy of the cess as an additional duty under Customs Tariff Act has been issued. Also, there are no provisions in the Foreign Trade Policy regarding levy of rubber cess on imported rubber. AIRIA has already sought clarifications on the issue from the Rubber Board.

In its communication, the Rubber Board has concurred that under the Rubber Act, only the rubber produced in India attracts cess and that the Board is the designated authority to collect the same. The notification issued by the Commerce Ministry regarding imposition of new rubber cess on 29 August 2011 also talks about cess on rubber produced in India only. In view of the widening gap between domestic rubber production and consumption, the import of rubber in significant amounts is inevitable. According to Rubber Board figures, the gap between domestic production and consumption widened to 133,400 tons in 2013-14. While the association has been asking for duty-free rubber imports to the extent of the domestic deficit, any cess on imported rubber will be counterproductive and affect the competitiveness of the rubber sector, said Niraj Thakkar, President AIRIA. Accordingly, AIRIA has asked both the Finance and the Commerce Ministry to issue necessary instructions to the field formations to release the rubber consignments without insisting on payment of rubber cess with immediate effect. (Hindu Business Line)