Rubber industries have urged for immediate discontinuation of cess levied on import of natural rubber (NR) as they consider the Customs department not empowered by the law to levy cess.
According to the All India Rubber Industries Association (AIRIA), cess can be levied only on rubber produced in India 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 the Customs Tariff Act had been issued. Also, there are no provisions in the Foreign Trade Policy regarding levy of Rubber Cess on the imported rubber. Presently, Rs 2 /Kg is being collected as cess on imported rubber also.
The AIRIA has sought clarifications on the issue from the Rubber board. In its communication, the board had concurred that under the Rubber Act, only the rubber produced in India attracts cess and that board is the designated authority to collect the same.
“Levy and collection of cess on rubber is governed under Section 12 of the Rubber Act 1947, according to which, cess is charged on rubber produced in India and the Rubber board is the designated authority to collect it, the board had informed the AIRIA.
The notification issued by the ministry of Commerce regarding imposition of new rubber cess in August 2011 also talks about levying of cess on rubber produced in India. “The Central government hereby appoints September 1, 2011, as the date from which the duty of excise at the rate of Rs 2 per kg of rubber shall be levied as cess on all rubber produced in India”, said the notification.
In view of the widening gap between domestic natural rubber production and consumption, import of rubber is inevitable.
According to the board’s figures, the gap between domestic production and consumption widened to 133,400 tonne in the financial year 2013-14. “While we have been asking for duty free natural rubber import to the extent of domestic deficit, any cess on import of rubber will be counterproductive and will affect the competitiveness of the rubber sector”, said Niraj Thakkar, president of AIRIA.
Accordingly, AIRIA has asked both finance and commerce ministries to issue necessary instructions to the field formations to release the natural rubber consignments without insisting on payment of rubber cess.
– Business Standard
