In a move which could enhance the competitiveness of the country's agricultural and marine exports, the government has abolished cess that would cost the exchequer Rs 110 crore (Rs 1.10 billion) a year.
The Cess Laws (Repealing and Amending) Bill, 2005, which was passed by Parliament on Wednesday was aimed at ensuring that exports of agri and marine products went up to 15 per cent of total exports from the present 10 per cent, accounting for about $10 billion in 2005-06.
Briefing reporters on the contours of the Bill, minister of state for commerce Jairam Ramesh said the abolition of cess would make commodities, including coffee, tobacco, spices, marine and agri products 0.5 per cent cheaper for exporters. Only wheat and basmati exports were exempted from the cess.
These commodities have a wafer thin margin of 1-2 per cent in the export market and by the levy of cess, the country was exporting taxes.
With this, exporters would not be required to go through the rigours of all customs procedures before the commodity can be physically shipped out of the country, he said.
This entails transaction cost, delays and compliance with procedural formalities of which most exporters have complained 'bitterly'.
India exported $277 million of tobacco, spices worth $399 million, coffee $81.3 million, fruits and vegetables valued at $352 million.
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