Tea exporters get 5% duty incentive

Written by Press Trust of India | New Delhi | Updated: Aug 29 2009, 03:18am hrs
The government on Thursday granted 5% duty incentive on tea export by including it in the Vishesh Krishi and Gram Udyog Yojna (VKGUY) scheme, a move aimed at boosting outbound shipments when the global economy is facing a downturn.

Export of tea has been covered under VKGUY scheme benefits, according to the Foreign Trade Policy 2009-14 unveiled by commerce minister Anand Sharma on Thursday.

Under the scheme, exporters are entitled to 5 per cent duty credit scrip on the export value of the consignment.

Sharma also announced the setting up of a single window system to facilitate exports of perishable agricultural produce.

For the marine sector, which has also been impacted by the global downturn, the new Foreign Trade Policy, also gave some duty concessions and sops to boost trade.

Meanwhile, an official with a Kolkata-based tea company said exporters can obtain the duty incentive when they import or they can claim it through the Duty Entitlement Passbook Scheme (DEPB) after the shipment.

India's tea exports between April and June fell to 36.08 million kg against 39.82 million kg in the year-ago period, mainly due to a contraction in demand following the economic crisis.

The government also eased the value-addition norm under the advance authorisation scheme.

Minimum value-addition under advance authorisation scheme for export of tea has been reduced from the existing 100% to 50%, the trade policy said.

According to a senior tea board official, the relaxation under this norm is likely to boost exports of tea after value addition (re-exports).

The government also raised the cap on sale of instant tea by export-oriented units in domestic tariff area.

DTA sale limit of instant tea by EOUs has been increased from the existing 30 per cent to 50 per cent.

The tea board official said the rise in the DTA sale limit on instant tea will benefit EOUs to fully utilise their production capacity.

The company official also said the government has taken the decision to raise the sale limit of the tea variety in the domestic tariff area as exports have been declining.