Union Budget 2017: Import duty hike won't help cashew

Kollam: The hike in import duty of salted and roasted cashew from 30% to 45% in the Budget 2017 unlikely to be of any considerable benefit to the industry as the quantity of salted and roasted cashew import is negligible compared to plain cashew. The denial of the state’s demand to withdraw import duty on raw cashew, they feel, will also continue to haunt the cashew processing units across the country. The import of salted and roasted cashew during April to September last year was only worth Rs 5 crore, with a yearly average of Rs 9 crore. Of this, nearly 80% will be plain cashew imported in the name of salted and roasted ones to evade tax.

“The government had in May 2013 hiked the import duty of plain cashew kernels from 30 to 45. After this, importers used to avoid tax by showing plain as salted cashew by faking the HS code tagged while importing. The new duty hike will only help check this illegal transport,” R.K. Bhoodes, Cashew Export Promotion Council of India (CEPCI) vice-chairman told DC. The import duty of 9.36% on raw cashew will continue to hit small-scale processors. For large-scale processors, advance authorisation (AA) provision, which is a commitment made to export the total quantity of processed cashew during the time of import, will give them import duty exemption. According to AA, 25% of the imported volume should be exported, that is the expected turnout of cashew.

However, many a time, processors are unable to achieve this quantity of outturn if the quality of cashew is substandard. “The budget is of no benefit to the cashew sector. The import duty should have been cancelled. There should also be a move to divert unused funds for women empowerment as the sector has a majority female workers. Constitution of a Cashew Board that was one of the demands was also not addressed, if otherwise would have saved the sinking industry,” S. Jayamohan, Kerala State Cashew Development Corporation chairman, told DC. The CEPCI had demanded a bank fund allocation of '16 crore in the current budget, while only '4 crore has been allotted – the same amount being sanctioned over the years. The CEPCI currently has an outstanding due of Rs. 36 crore, in the account of promoting automation and mechanisation, given as subsidies for the processors.