Export Duty Current Affairs - 2019
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The Central government has increased the minimum selling price (MSP) of sugar by Rs. 2 per kg to Rs. 31.
Minimum Selling Price
Minimum Selling Price is the rate below which the mills cannot sell sugar in the open market to wholesalers and bulk consumers like beverage and biscuit makers.
Rationale behind the Increase
The decision to increase the minimum selling price has been taken keeping in mind the debt burden of the industry. As per the data provided by the Indian Sugar Mills Association, arrears of sugarcane farmers stood at around Rs. 20,000 crore as of January-end.
The increase in the Minimum Selling Price is expected to help millers to make the payment to sugarcane farmers. The government is also putting in place a mechanism to ensure the benefit due to the increase in the minimum selling price is passed on to the sugarcane farmers.
Other Steps taken to aid the ailing Sugar Mills
The government has taken several other steps like the increase in import duty on sugar to 100 per cent, scrapping of export duty, the creation of buffer stock, and subsidy for mandatory export of 5 million tonnes in the 2018-19 marketing year to help cash-starved mills clear cane dues.
The Union Government has abolished export duty on iron ore pellets in order to make the commodity more competitive amid weakening prices due to subdued demand.
In this regard Central Board of Excise and Custom (CBEC) has issued a notification mentioning that export duty on iron ore pellets has been reduced to zero from 5 per cent.
This decision will help improve capacity utilisation of pellet plants and give a necessary boost to the sector. Earlier in 2014, Union Government had levied a 5 per cent export duty on iron ore pellets.
Iron ore pellets are value-added products of leftover material or low-grade iron ore and are mainly used in steel-making industry.
Reasons for decline in global commodity prices
- Due to global economic slowdown and decrease in demand followed by increase in supply (production) has attributed to decrease in global commodity prices especially minerals and oil.
- Steel and its related raw material market is also facing a tough time on account of subdued demand and high production which in turn is adversely impacting the prices.
- Besides fall in demand in China, world’s largest metal consumer also has attributed to falling in commodity prices.