Cess on agri, marine product exports to go

New Delhi, May 18 | Updated: May 19 2006, 05:30am hrs
The government has abolished cess on exports of agriculture and marine products. While the move is expected to increase competitiveness by lowering export prices by 0.5%, it would cost the exchequer an estimated Rs 110 crore every year in the form of revenue.

The cess laws (repealing and amending) Bill, 2005, passed by the Parliament on Wednesday, will abolish cess on coffee, tobacco, spices, marine and agri products. Agri products include flowers, fruits & vegetables (fresh & processed), non-Basmati rice, animal products and other processed food. There was no existing export cess on either tea, wheat or Basmati rice.

Minister of state for commerce Jairam Ramesh said on Thursday that the levy of cess was not only increasing costs of exporters but was also leading to procedural hassles because of all the related formalities. He added that the government was now attempting to increase the share through such moves.

The abolition of cess would certainly do its bit in helping exporters of such product since they operate on very thin margins in the international market.