Be it enacted by Parliament in the Fifty-seventh Year of the Republic of India as follows:

Prefatory Note Statement of Objects and Reasons. At present the export of several agricultural products are subject to levy of cess under different enactments such as, the Agricultural and Processed Food Products Export Cess Act, 1985, the Tobacco Cess Act, 1975, the Spices Cess Act, 1986, the Marine Products Export Development Authority Act, 1975 and the Coffee Act, 1942.

2. In recent years, international trade in agricultural products has become extremely challenging for India with the emergence of new competitors. Some of these competitors have a negligible domestic demand and can export almost their entire produce at very cheap rates, thus, displacing the conventional demand for Indian products in the international market. Further, many developed countries provide huge subsidies to support their domestic agriculture. These subsidies enable these developed countries to establish and corner large shares in global markets. A cess on Indian exports is a handicap to our exporters and provide other countries exporters with a competitive edge.

3. From a policy perspective, the Central Government has taken the consistent view that taxes and duties ought not to be exported. The cess levied under all the Acts referred to above is unambiguously an export tax. Imposition of such an export duty tax is clearly anomalous and runs counter to policy. It reduces competitiveness of agricultural exports and is plainly unjustifiable. The only action consistent with Government's avowed policy is to do away with the cess collected under abovesaid statutes.

4. Since the cess is levied as a duty of customs, the exporter is required to go through the rigours of all customs procedures before the commodity can be physically shipped out of the country. This entails transaction costs, delays, and compliance with procedural formalities. Most exporters have complained bitterly about these transaction costs and have strongly pleaded for altogether removing all such cess levies.

5. The enactments levying the cess do not contain any provision for grant of exemption. It is, therefore, proposed to repeal the Agricultural and Processed Food Products Export Cess Act, 1985, the Spices Cess Act, 1986, Sections 14 and 15 of the Marine Products Export Development Authority Act, 1972, Sections 11 and 13 of the Coffee Act, 1942 and to amend the Tobacco Cess Act, 1975, to abolish cess on the export of agricultural products levied under the respective Acts.

6. This Bill seeks to achieve the above objects.