Is govt promoting crude palm oil?

the department of revenue jacked the tariff value of palm oil by 10 per cent on december 7. the move followed the recent jump in international prices of crude palm oil at the indian ports to $340 per tonne. the 60 per cent duty on cpo will now be calculated on the basis of the new tariff value of $314 per tonne. the actual cif value may be more than the official tariff value but this fact will be ignored at the time of duty calculation. in the short run, the effective duty may be less than 60 per cent since the ruling price is higher than the official tariff value. (the importer is compensated to an extent for the huge loss suffered in the past when the tariff value was well above the actual cif price.) the tariff values of the derivatives of palm oil were also scaled up. thus, rbd (refined, bleached and deodorised) palm oil tariff value was fixed at $341, rbd palmolein was pegged at $349 and crude palmolein was placed at $334. there is no change in the tariff value for brass scrap which continues at $1,030 per tonne. the remarkable thing about the new set of tariff values is that the department of civil supplies which controls the edible oil and sugar industry has decided on its own to promote the import of crude oil and discourage refined variety by the tariff value mechanism. thus the differential between crude and refined palm has been artificially widened to $27 per tonne against $9 per tonne in the previous dispensation. similarly, the hike for refined palm oil is $46 per tonne, which is nearly two times the rise in the tariff value of cpo. substantial discrimination between adjacent points in the value chain favours domestic refiners whose value addition is already protected by a tariff wall. multiple distortions in the market, imbalance in the prices of palm oil and other oils, and loss of economic efficiency and consumer welfare are some of the negative effects of the disproportionate tariffs values. loading the instrument with multiple objectives impairs the system and may also result in tragic economic accidents and even disasters. the tariff value mechanism itself is an artificial construct designed to standardise valuation and check under invoicing. minister for civil supplies shanta kumar should publish the objective and the underlying calculations behind the tariff value system. budget blues: the countdown to budget 2002 has already begun. this time round, there is an atmosphere of uncertainty in the department of revenue at the top as it is not clear who is doing what. the commerce ministry is better prepared this time round. our sources say dgft nl lakhanpal will be there to present the next five-year exim policy due in april 2002. we understand that the dgft post has been upgraded from additional secretary to special secretary to accommodate lakhanpal till the new policy release. the falling exports should make the government sit up and take a fresh look on how to do things. it should consider taking a leaf form the book of the states. thus the andhra government is seriously considering releasing the draft budget to the public before presentation to the state assembly to get the comments and suggestions of users. the trade and industry will not be used as guinea pigs for the experiments of bureaucrats in trade promotion and industrial development. it is time the central government considers following the chandrababu naidu's path. open and transparent policy making based on trust and consultation should replace the secrecy and surprise in the budget or exim policy. patna port: import and export of goods was allowed through patna airport from november 28. the customs have done well to notify the airport for regular trade. the earlier dispensation confined the movement only to baggage. the general perception that bihar is in a mess and the extension of the free export and import facility will result in misuse is not correct. the capital of bihar is the gateway for nepal trade. the notification will place bihar on the trade map and remove the bottle neck in the way of export of agro products from the rich soil of the state. clarifications: in a landmark clarification, naphtha used indirectly for fertiliser manufacture was placed is on the same footing as inputs used directly in the manufacture of fertilisers. the concessional duty on direct inputs is now available on indirect inputs also. the department should have given the clarification in a general sense to facilitate the carriage of the naptha-fertiliser logic to the universal realm. let us hope that the ratio of this clarification is extended to similar cases in the past and present. (this is too much to expect from the bureaucrats. one can well imagine the exercise and effort of the refineries and fertiliser companies to get the department to do what they have done.) in another clarification, the department has defined a book. after careful removal of the context in the parasrampuria case decided by the supreme court, the department has asked the commissioners to give the duty free treatment to books which satisfy all of nine criteria. pending assessments of plans and drawings termed as books and printed manuals will be finalised according to this criteria and subjected to the earlier 10 per cent duty. thus only publications which have a subject, an author, publisher, price, serial numbering and binding, isbn code, general availability, absence of an mou, lack of confidentiality will be termed as a book from now onwards. this is not withstanding the treatment in heading 49.01 of the internationally-accepted and legalised harmonised system classification and its explanatory notes. the clarifications is difficult to understand as the government itself decided not to tax knowledge inflows and reduced the duty on plans and drawings from 10 per cent to zero. past cases should have been decided liberally on the explicit statement of the intentions of the government of the day. now the government itself has created two categories of importers for the same goods. the commissioner of drawback has issued the much-awaited clarification stating that embroidered garments are covered under the generic term garments. similarly, quilted garments and quilted made ups too are subsumed under the respective generic term. the statement of the obvious should help exporters in the net of smart officials who were able to find the differences in classification categories to stop drawback. (academy of business studies)

Is govt promoting crude palm oil?

THE DEPARTMENT of Revenue jacked the tariff value of palm oil by 10 per cent on December 7. The move followed the recent jump in international prices of crude palm oil at the Indian ports to $340 per tonne. The 60 per cent duty on CPO will now be ...

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