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 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.
Levying cess
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 August 29, 2011 also talks about cess on rubber produced in India only.
Growing gap
In view of the widening gap between domestic rubber production and consumption, the import of rubber in significant amount is inevitable.
According to Rubber Board figures, the gap between domestic production and consumption widened to 1,33,400 tonnes in 2013-14.
While the Association have been asking for duty-free rubber import to the extent of 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.
– The HIndu
