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Change mooted in jute goods cess -- To mobilise extra funds

Our Bureau

CALCUTTA, Nov 22

THE Union Textiles Ministry has initiated an exercise for repeal of the Jute Manufactures Cess Act, 1983 and bring in a fresh enactment to garner additional funds, which are used to finance the external market assistance (EMA) scheme as also promotional activity of Jute Manufactures Development Council (JMDC).

The Ministry also proposes to change the basis of cess collection and introduce uniform advalorem rate of two per cent, irrespective of a product. Under the 1983 Act, cess is collected at different rates based on the quantity produced.

According to the Ministry's estimates, if the annual turnover from jute goods is reckoned at Rs 3,000 crore, the cess collection would be Rs 60 crore, which would mark a significant increase on the current collection of Rs 25 crore.

Since cess collection is not enough to fund the EMA scheme, the Ministry recently decided to opt for a change. The backlog of EMA disbursement touched Rs 62 crore as on March 31, 2000 and it is expected to cross Rs 80 crore by March 31, 2001. Incidentall y, the rates of duties currently effective for the 10 jute items have reached the upper limit under the present Act.

The present cess collection of Rs 25 crore marks an increase from Rs 8 crore in 1983 due to rate revisions ; first effected in 1991 and then in 1997.

It may be mentioned that under the Jute Manufactures Cess Rules, 1984, the cess proceeds are credited to the Consolidated Fund of India from which a portion is given to JMDC after deducting the cost of collection.

According informed sources, as the jute mill industry is willing to pay additional cess and thereby get an export incentive in the form of EMA, the Ministry proposes to give retrospective effect to the contemplated change from April 1, 2000.