Diversion Of Cigarette Imports Alleged

The Tobacco Institute of India has written to the finance ministry expressing fears that large quantities of cigarettes brought into the country ostensibly for re-export are being diverted into the domestic market.

The institute has expressed apprehension that a large portion of such imports never actually sent to export destinations. This, says the institute, affects the domestic industry and results in a large-scale loss of revenue to the government.

The institute has sought information regarding the quantity and value of import of cigarettes in-bound for the purpose of re-export.

Under the export regulations, goods imported may be exported in the same form or substantially the same form without a licence, provided the item is not in the negative list of imports. An exception is made for items imported under special import licence or those in the negative list of exports.

Export of such items imported against payment in freely convertible currency is permitted against payment in similar currency. However, if such goods are exported against payment in rupees, they are subject to a minimum value addition of 100 per cent, provided the item to be exported is not in the negative list of imports.

Goods, including those in the negative list of imports or negative list of exports (except prohibited items in either list), may be imported for export in freely convertible currency without a licence subject to the following conditions:

* There is a minimum value addition of 10 per cent;

* The goods will be imported under customs bond;

* Import and subsequent export of the goods will be made from the same customs bonded premises; and

* Such goods shall not be taken outside the customs bonded premises.