Flaws in Import Policy Notification issued by DGFT; PMFAI appeal for correction

The Pesticide Manufacturers & Formulators Association of India (PMFAI) has reached out to the Director General of Foreign Trade (DGFT) to correct the errors in the import policy issued for newly created HS Codes for Pesticides.

As per Mr. Pradip Dave, President of PMFAI, ″The errors in the policy may lead to the free flow of imports affecting domestic manufacturing companies but also sizeable revenue losses to Government. The said Notification has errors in import policy conditions laid down for 14 Technical Grade Products, which requires correction and amendments.″

PMFAI has submitted a representation mentioning corrections required to DGFT thrice in June 2023 with copies to all concerned Departments including the Department of Revenue, Central Board of Indirect Taxes & Customs (CBIC), Department of Chemicals & Petrochemicals and Central Insecticide Board & Registration Committee.

Correction is required in import policy conditions laid down, as all Imports including commercial imports for 14 products shall be subject to a Registration Certificate issued by the Central Insecticides Board & Registration Committee (CIB&RC) under the Ministry of Agriculture and Farmers Welfare, which includes commercial imports″ as per Insecticides Act, 1968.

Correction in applying Basic Customs Duty (BCD)

While shifting the 14 Technical Grade of Pesticides from Chapter 38 to Chapter 29 of CTA, 1985 through amendment in Finance Bill 2023, instead of applying a Basic Customs Duty rate of 10% on such products, a lower basic customs duty rate of 7.5% is applied which requires correction to make it as 10%. There are some Technical Grade items like Glyphosate which is still under Chapter 38 and also under Chapter 29, but when imported under Chapter 29 BCD is 7.5% while under Chapter 38 it is 10% BCD, mentioned Mr. Dave.

The ready-to-use Pesticide Formulation which is in Chapter 38 of CTA, 1985 should attract 15% of basic customs duty, as per the decision taken by the Government. The association hopes to get the corrections in place at the earliest to avoid misuse of the new rules.