Lanka FTA misused to dump spices
Financial Express, India
Lanka FTA misused to dump spices
AJAYAN
15 May 2006
KOCHI, MAY 14: The customs authority is probing the misuse of the Indo-Sri Lanka free trade agreement (FTA), whereby cloves and arecanuts of different origins have come into India recently from Sri Lanka.
The industry was plagued earlier by spices from Pakistan entering the country, through the Nepal route, for duty evasion. The Spices Board had stepped in resulting action against the importer.
This time however, the Sri Lankan authorities are believed to have uncovered a racket, where around eight consignments of cloves and arecanuts worth around Rs 111 crore from Indonesia were shipped into India over the last few months, forging documents showing to be of Sri Lankan origin.
Customs authorities in India said they were looking into the matter, and would be in contact with Sri Lankan customs authorities, who had identified the shipper.
Though the importer would clearly wash his hands off the deal, claiming he was not directly involved in it, the customs authorities said they would investigate the matter to ensure that the whole racket, which would include the shipping company, the shipper, the importer and the original exporter, was busted.
It is learnt that the Lankan authorities have already booked the shipper, who was hand-in-glove with the supplier from Indonesia. The authorities said that they were also looking into whether the consignments did call at the Colombo Port.
There were also several cases of material from other origins being under-invoiced by two to three times. While Sri Lankan consignments of arecanuts were properly billed as there was no duty under the free trade agreement, material of other origins were invoiced at very low rates to overcome the duty effect, they said.
Pepper imports from Sri Lanka also had to be probed, as there were allegations of pepper of other origins coming into India via Lanka, which would adversely affect the domestic industry, sources said.
