Red Lentil / Madur Dal: Custom Duty Removed; Agriculture Infrastructure Cess Reduced to 10%

  • The central government has cut the import duty to zero and halved the Agriculture Infrastructure Development Cessin to boost domestic supply and check rising prices.
  • The retail prices of Masoor Dal had increased by 30% to Rs 100 per kg while it was only Rs 70 per kg in April 2021. 

A notification was tabled in Rajya Sabha by Finance Minister Nirmala Sitharaman that stated reduction in Custom Duty to nil on lentils originated in or exported from countries except the USA. The customs duty has been reduced from 30% to 20% on Masur grown in or shipped from the USA. Also, the Agriculture Infrasture Cess on Masur has been reduced from 20% to 10%.

This step has been taken to avoid any further increase in the prices of Masur, which will mostly remain range-bound and boost the domestic supply. While Indian pulses and Grains Association claims that the government’s decision to reduce import duty on Masur will not help reduce Masur prices in India. It will only help Canadian and Australian farmers who will export to India.

Current Prices of Masur :

Wholesale prices at the Mumbai market are around Rs 66000/ quintal from around Rs 59000/quintal in March, a rise of about 12% in four months. According to trade estimates, India consumes about 20 Lakh tones of Masur in a year, producing nearly 9 Lakh tones during the previous Rabi season.

About Agriculture Infrastructure Development Cess:

The government had introduced the Agriculture Infrastructure Development Cess on certain items to improve Agriculture infrastructure aimed at boosting production and helping conserve and process farm output efficiently. It is kind of a particular purpose tax that is levied over and above introductory tax rates. The government, however, makes sure that not much of an additional burden is put on the consumers.

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