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Clarifications regarding Export Cess on processed & primary fruits
& vegetables
Circular No. 3 dated 7th January
2000
Board has
received various reports from field formations that divergent practices are
being followed by different Customs Houses with regard to collection of Export
Cess on export of Gherkins, processed in Brine/ Acetic Acid/ Vinegar. The same
practice is also being followed in respect of other processed food products. It
has been reported that whereas, at some places, Export Cess at the rate of 0.5%
is being collected only under the Agricultural and Processed Food Products
Export Cess Act, 1985 whereas at some other places, cess is collected twice;
first at the rate of 0.5% under the Agricultural Produce Cess Act, 1940 and
again at the rate of 0.5% under the Agricultural and Processed Food Products
Export Cess Act, 1985.
2. In
this connection, it is stated that Ministry of Food Processing Industries has
clarified that the cess cannot be charged twice on the same item by treating it
as a primary product and also as a processed product. Ministry of Agriculture
has also confirmed that Cess cannot be collected twice on the processed fruits
and processed vegetables, both under Agricultural Produce Cess Act, 1940 and
Agricultural Produce Cess (Amendment) Act, 1966.
3. In
view of the clarification given by the concerned administrative Ministries, i.e.
Ministry of Food Processing Industries and the Ministry of Agriculture, it is
amply clear that cess on such products is to be collected only once i.e. if the
item is a primary product, the cess should be collected under the Agricultural
Produce Cess Act, 1940 and if the item is a processed product, the cess should
be collected under the Agricultural and Processed Food Products Export Cess Act,
1989.
4. You are requested
to issue suitable instructions to field formations so that the correct practice
of levying cess is uniformly followed.
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