Dubious Sri Lankan imports flatten marble processors

Around 3,500 marble processors are in trouble following large scale imports from Sri Lanka. Indian processors have a cumulative turnover of more than Rs 4000 crore per annum and are concentrated in Rajasthan, Karnataka, Gujarat, Tamil Nadu, Delhi and Maharashtra.

According to industry sources, around 30 container-load of marble slabs were being imported daily through ports from Sri Lanka.

These goods are received by traders who have set up processing facilities to take advantage of the Indo-Sri Lanka Free Trade Agreements.(ISFTA).

Under the agreement, the marble can be imported at zero duty against 51 per cent import duty levied on marble from other nations like China and Europe.

Importers produced a "origin of Sri Lanka" certificate from the Sri Lankan authorities. However, there were no marble mines in Sri Lanka, industry sources alleged.

Therefore the goods, not being produced or manufactured in Sri Lanka could not be eligible for zero duty imports under certificate of origin rules.

"Customs authorities are granting exemption only on basis of certificate of origin issued by Sri Lankan authorities without examining whether conditions regarding proof of country of origin as specified in Customs Tariff Rules 2000 are complied with", said top officials of Kishangarh Marble Association.

Marble processors said some traders had set up a small processing unit in Sri Lanka to import marble slabs from Europe for re-export to India. This enabled them to bypass the tax on imports from Europe.

"If such imports continued, marble processing units will be in serious trouble", said Shanker Singh Sisodiya, vice-president of Rajatshan Khanij Utpadak Mahasangh, an industry association representing mine owners and processors.

The government of India (GoI) has lost revenue of almost Rs 100 crore in the last 18 months on account of imports from Sri Lanka.

Stone worth of Rs 200 crore was expected to be imported from Sri Lanka in the remaining three months of this fiscal till March 2004.

Under the EXIM policy, import of rough marble fall under the category of restricted items. Import licences are available to importers only on basis of past performance. Such official imports attract import duty of 51 per cent.

However, stone from Sri Lanka attracts zero duty under the free trade agreement between India and Sri Lanka signed in 2000.