Cashew looks for export sops

Irked by the various levies without rebates borne by exporters while procuring, processing and exporting cashew kernels, the Cashew Export Promotion Council of India (CEPC) has called for a higher duty entitlement pass book (DEPB) support from the Centre.

According to Walter D'Souza, chairman, CEPC, the cashew industry in India is already reeling under the appreciation of the rupee against the dollar.

This has come at a time when the industry is suffering high processing costs and non-remunerative export prices due to intense competition from cashew producers such as Vietnam.

Pointing out that the Centre has, on October 9, slashed the DEPB rates for cashew from 3 per cent to 1.5 per cent, he said this notification had dealt a body blow to the entire cashew exporting community in the country.

"This has come at a time when the industry was urging the government for a higher DEPB to help the community survive, and has effectively ended up in just the opposite. This cut has put the industry in a tough situation," D'Souza said.

Adding that the cashew processing was a highly labour-intensive industry, requiring 400 man-days to export one metric tonne of cashew kernels, he said the processing was carried out in multiple factories located at different places.

"Grading and packing of finished products are centralised due to marketable quantity accumulation requirements. This calls for a lot of transportation, right from the procurement to the shipment stage. The main levies incurred include Central Sales Tax on raw cashewnuts, APMC, electricity and transportation taxes and one on petroleum products. "

"These levies without rebates are in addition to the fringe benefit tax and the like. Further, these are difficult to be quantified as a percentage of exports," he lamented.

Urging the finance ministry to consider the impact of all central levies as well as the rupee appreciation and allow a higher DEPB for cashew, D'Souza said the tax component itself comes to over 6.5 per cent.

He called upon the finance ministry to raise the DEPB support to an additional 5 per cent over the 3 per cent for the rupee appreciation for 2006-07, bringing the total to 8 per cent.

D'Souza also called upon the Kerala Chief Minister to put pressure on the Centre to raise the DEPB.