Trade Notice No. 03/2012, Date : 24th May, 2012
Sub: Clarification regarding standard weight and tolerance in weight of 1 bale of cotton.
Notification Number 113 issued on 4th May, 2012 deals with registration of contracts for export of cotton. Para 2(iii) of this notification clearly mention that 1 bale = 170 kgs. [ Thus 1 standard bale would be of 170 Kg weight]
2. It has been brought to our notice that some exporters find it convenient to have bales of lesser weight, and also that various bales may contain different quantity of cotton depending on local condition. Thus a bale of cotton may weigh more or less than the exact 170 Kg. A similar clarification was issued last year to Cotton Association of India on 04.02.2011 and this should have settled the issue. For greater clarity the following be noted:Online GST Certification Course by TaxGuru & MSME- Click here to Join
(i) Presumption is that 1 bale would contain 170 Kgs. Hence if the allotment is 10 bales, then the exporter is permitted to export a maximum of 1700 Kgs or 1.7 MT. But if bales are of smaller weight it may be more than 10 bales, or if they are of greater weight, it may be less than 10 bales. Thus when the permission is for 10 bales, the implication is that there are 10 standard bales, each weighing 170 Kg. If the bales are non-standard, then it would be important to watch the weight which must not exceed 1.7 MT irrespective of the number of such non-standard bales.
(ii) RC holders who are found to have defaulted in exporting the quantity allowed would be liable for penal action as mentioned in Policy Circular No. 51 dated 28.12.2011. Here critical test on “quantity” would be weight (taking 1 bale = 170 Kg) and not number of bales. Any shortfall upto 5% in weight, however, will not invite penal action.
3. This issues with the approval of DGFT.