Clarification on Customs Duty exemption for new items of Border Trade pending with Union Finance Minister

VISHU NEOPANEY
GANGTOK, 15 June: Customs duty exemption on the 5 newly added items in the Border Trade list between Sikkim and Tibetan Autonomous Region (TAR) has been lying at the highest level of the Finance Ministry for consideration and directions ever since it triggered confusion and heartburn among border traders here. The demand for a revision of the obsolete trade list was finally granted on the seventh episode of trading this year, but unclear directions have left the traders upset.
While border trade has traditionally been duty-free, when five new items were added to the list this year, the permission came without any specific directions on whether or not they were also exempt from customs duty. The concerned officials here decided to interpret the absence of specific exemption as a tacit direction to impose duty. This is being protested by traders here who had even boycott border trade in the initial days. Border Trade had resumed for the current season on 21 May last month.
Sources in the Ministry of Commerce and Industries inform that the matter has been pending with the Union Finance Minister Pranab Mukherjee’s office for clarification. The Customs office comes under the Ministry of Commerce and Industries but raises revenue [by way of Customs Duty] for the Finance Ministry.
The exemption being a policy decision, the Union Minister’s endorsement becomes necessary, it is explained.
Officials further assure that the office of the Director General of Foreign Trade [under the Ministry of Commerce & Industries] has taken the matter seriously after traders and the Sikkim government took up the issue with it.
The Customs Office at Gangtok has also sought clarification on the issue through an official communiqué to its seniors but is yet to receive any communication from the Ministry or higher authority in Kolkata.
Meanwhile, the State Commerce and Industries Department Secretary, BK Kharel, while speaking to NOW!, said that the proposal for exemption is still under consideration with the Centre.
He stressed that logically and legally, Border Trade is exempted from customs duty since it involves only limited trading and is essentially an initiative to promote border areas and its people.
“The clear exemption of customs duty from the new items is yet to be issued by the Finance Ministry (Revenue Department of Finance Ministry) and the Ministry of Commerce and Industries has taken it up with the Finance Ministry, the executing agency of customs duty,” Mr Kharel informs.
The State government has taken up the issue with the Director General of Foreign Trade and Poorest Produce Export Promotion Council to expedite the matter at the highest level.  
At the same time, the Director General of Foreign Trade and Poorest Produce Export Promotion Council has also recommended Sikkim’s case as being purely that of border trade in terms of taking a policy decision at the highest level.
Mr Kharel further stated that since the earlier 15 items on the trade list are exempted from customs duty, the 5 new items cannot be levied with taxes either. “There should not be two types of border trade policies,” he added.