CESS LAWS (REPEALING AND AMENDING) ACT, 2006 [REPEALED]

CESS LAWS (REPEALING AND AMENDING) ACT, 2006 [REPEALED]

Preamble 1 - CESS LAWS (REPEALING AND AMENDING) ACT, 2006

THE CESS LAWS (REPEALING AND AMENDING) ACT, 2006

[Act, No. 24 OF 2006]

[1st June, 2006]

PREAMBLE

An Act to repeal certain enactments and to amend certain other enactments relating to levy of cess on certain items.

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

Section 1 - Short title

This Act may be called the Cess Laws (Repealing and Amending) Act, 2006.

Section 2 - Repeal of certain enactments

The enactments specified in the First Schedule are hereby repealed to the extent mentioned in the fourth column thereof.

Section 3 - Amendment of Act 26 of 1975

The enactment specified in the Second Schedule is hereby amended to the extent and in the manner mentioned in the fourth column thereof.

Section 4 - Savings

(1)     The repeal or amendment by this Act of any enactment shall not?

(a)      affect any other enactment in which the repealed enactment has been applied, incorporated or referred to;

(b)      affect the validity, invalidity, effect or consequences of anything already done or suffered, or any right, title, obligation or liability already acquired, accrued or incurred or any remedy or proceeding in respect thereof, or any release or discharge of or from any debt, penalty, obligation, liability, claim or demand, or any indemnity already granted, or the proof of any past act or thing;

(c)      affect any principle or rule of law, or established jurisdiction, form or course of pleading, practice or procedure, or existing usage, custom, privilege, restriction, exemption, office or appointment, notwithstanding that the same respectively may have been in any manner affirmed or recognised or derived by, in or from any enactment hereby repealed;

(d)      revive or restore any jurisdiction, office, custom, liability, right, title,, privilege, restriction, exemption, usage, practice, procedure or other matter or thing not now existing or in force.

(2)     The mention of particular matters in sub-section (1) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897(10 of 1897), with regard to the effect of repeals.

Section 5 - Collection and payment of arrears of duties

Notwithstanding the repeal of the enactments specified in the First Schedule or the amendments in the enactment as specified in the Second Schedule, the proceeds of duties levied under the said enactments immediately preceding the date on which the Cess Laws (Repealing and Amending) Bill, 2006 receives the assent of the President.--

(i)       if collected by the collecting agencies but not paid into the Reserve Bank of India; and

(ii)      if not collected by the collecting agencies, shall be paid or as the case may be, collected and paid into the Reserve Bank of India for being credited to the Consolidated Fund of India.

Schedule I - FIRST SCHEDULE

THE FIRST SCHEDULE

(See section 2)

Repeals

Schedule II - SECOND SCHEDULE

THE SECOND SCHEDULE

(See section 3)

Amendments

Statement of Objects and Reasons - Cess Laws (Repealing and Amending) Act, 2006

STATEMENT OF OBJECTS AND REASONS

1.        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 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 above said 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.