Export Duty Levied on Parboiled Rice: Customs Update

In a significant move by the Ministry of Finance, the government has introduced a new directive regarding the export duty on parboiled rice. This amendment, rooted in the Customs Tariff Act of 1975, is designed to adjust India’s rice export dynamics in line with its broader financial strategies.

The Immediate Need for Action

The Central Government’s decision to amend the Customs Tariff Act by introducing an export duty on parboiled rice has been driven by perceived exigencies that necessitated swift policy intervention. The government’s acknowledgment of the essentiality to levy duty on certain commodities indicates a reactive approach to potentially fluctuating market conditions or other economic factors.

Inclusion in the Customs Tariff Act

The crux of this directive lies in the formal inclusion of parboiled rice within the Second Schedule of the Customs Tariff Act:

• Location of Inclusion: Following the existing Sl. No. 6B, the new entry will be designated as Sl. No. “6C.”
• Details of the Entry: The specific category to which this applies is detailed under the product code “1006 30 10”, labeled as “Rice, parboiled”, with an export duty of “20%”.

Effective Immediately

Emphasizing the urgency and the significance of this directive, the government has mandated its immediate enforcement, ensuring that any exports of parboiled rice from the effective date will be subject to this newly introduced duty.

Potential Implications

The introduction of an export duty on a staple commodity like parboiled rice can have multifaceted implications:

1. Market Dynamics: This might affect the global competitiveness of India’s rice exports, potentially causing exporters to reconsider their pricing strategies.
2. Economic Factors: The revenue generated from this duty could be used to fund government projects or balance potential trade deficits.
3. Domestic Impact: Such a levy could also be aimed at ensuring domestic rice stability, discouraging excessive exports, and maintaining sufficient stocks within the country.

Conclusion

The move to impose an export duty on parboiled rice reflects the government’s proactive approach to managing India’s trade ecosystem. While the immediate reasons for this action are not explicitly stated, it’s clear that this decision has been made after considering broader economic and market factors. It will be interesting to observe the ripple effects of this decision on both the domestic and international fronts in the coming months.

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Ministry of Finance
(Department of Revenue)

Notification No. 49/2023-Customs | Dated: 25th August, 2023

G.S.R. 628(E).—Whereas, the Central Government is satisfied that export duty should be levied on certain articles and that circumstances exist which render it necessary to take immediate action.

Now, therefore, in exercise of the powers conferred by sub-section (1) of section 8 of the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Customs Tariff Act), the Central Government, hereby directs that the Second Schedule to the Customs Tariff Act shall be amended in the following manner, namely: –

In the Second Schedule to the Customs Tariff Act, after Sl. No. 6B and the entries relating thereto, the following Sl. No. and entries relating thereto shall be inserted, namely: –

2. This notification shall come into force with immediate effect.

[F. No. CBIC-190354/161/2023-TRU]

AMREETA TITUS, Dy. Secy.