Pepper trade seeks 5% MEIS only on net export earnings
The Indian Pepper and Spice Traders, Producers, Planters Consortium (IPSTPC)-Kerala Chapter has urged the Union Commerce minister Suresh Prabhu that the Merchandise Export from India Scheme (MEIS) for imported raw material should be given only to the extent of their net export earnings and not on the entire value of export.
The Consortium claimed that importers are entitled to the benefit of MEIS 5 per cent from the Centre on the entire value of export which is 115 per cent minimum, while 100 per cent value is already drained out from the country when they imported cheap raw material spices including pepper.
“Thus, the Centre is providing subsidy or incentive to the import value as well, which in turn goes to the farmers, growers, planters of other pepper producing countries,” said Kishor Shamji Kuruva, Head of IPSTPC Kerala Chapter.
In fact, this practice is already in vogue in the Spices Board while selecting exporters for export achievement award. The eligibility of each exporter for being considered for the award is based on the net export value, after deducting the value of imports, he said. Similarly, the Centre should also follow this criteria when it gives away MEIS benefit to these exporters, he said.
According to the IPSTPC, globally 90 per cent capacity of extraction of spices have shifted to India following a mandatory requirement in all other countries like Europe, the US and Canada that the extracted waste should be destroyed by the units. Consequently, these units became uncompetitive with their Indian counterparts who are able to sell their extracted waste and make good money out of the waste of duty free imported spices.
Claiming that indigenous spices are costlier due to strong domestic demand and higher cost of production, importers bring them in under Advance License without paying any duty besides enjoying the MEIS benefit to the whole value of the material exported, he said.
The farmers, producers and planters as well as small and medium traders have strongly raised concerns about some portion of such imported pepper slipping into the domestic market due to attractive price difference.