Three exporters went to the Andhra Pradesh High Court to challenge the Centre’s curb on rice exports. A bench of Justices C Praveen Kumar and AV Ravindra Babu sent a notice to the Ministry of Finance’s Revenue Department and the Visakhapatnam Commissioner of Customers.
The three exporters had asked the court to issue a writ of mandamus to let their shipments go through duty-free since ‘let export’ orders had been given on September 8.
The Centre put out an order on September 8 to stop rice exports starting September 9. In its orders, the Centre banned the export of broken rice and put a 20% tax on white rice, brown rice, and paddy that was not made from basmati. It has not put any limits on Basmati and already-cooked rice.
In their petition, Delhi-based PJS Overseas, Raipur-based AVI International LLP, and Thane-based MFG Overseas Pvt Ltd said that the limits were ‘arbitrary, illegal, and unfair’ and went against the Customs Act of 1964. They also said that the order went against their rights under Article 14 and Section 19(1)(G) of the Constitution.
The petitions said that their shipment of rice, which was meant to be exported, had arrived at the Visakhapatnam port long before the Centre issued a notice putting a 20% duty on ‘semi-milled or wholly-milled rice,’ and loading had already started.
Need a long time to decide
They said that the shipping bills and the letter of export order had been sent out a long time before the notice about the limits. The exporters said that they would suffer ‘irreparable loss’ if they couldn’t send the goods.
The lawyer for the Customs Department said that the writ petition needed a long decision and asked for some kind of security for the shipment that was to be sent out without 20% duty.
At this point, the judges said they did not want to talk about whether or not the petitions had to pay the 20% export duty. So, they told the exporters that they had to show a bank guarantee for 40% of the export duty that had to be paid within a week. The judges said that if the shipper didn’t pay, the port authorities could handle the shipment ‘according to the law.’
India cut back on rice exports when its prices started going up on the domestic market. This was because there wasn’t enough rain in key growing areas like West Bengal, east Uttar Pradesh, and Jharkhand during this Kharif season, which made it hard to plant crops.
Bangladesh was trying to stock up on rice and China was looking to buy more after a 75-day heat wave in the Communist country hurt the paddy crop badly.
The Ministry of Agriculture says that 104.99 million tonnes (mt) of rice will be grown this Kharif season, which is less than the 111.76 mt that were grown last year. Data from the Consumer Affairs Ministry showed that the price of rice in stores has gone up by 9.24% since a year ago, to ₹38.17 per kg.