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The Andhra Pradesh high court has allowed the export of non-basmati rice from Visakhapatnam port without customs duty but backed by a bank guarantee, in response to a plea filed by the exporters.

The interim relief to rice exporters gains special significance as an estimated 700,000 to 1 million tonnes of rice got stuck at various ports such as Kandla, Jawaharlal Nehru Port Trust (JNPT), and Visakhapatnam after the government banned exports of broken rice and imposed 20% duty on certain varieties of rice.

The high court refused to pass an immediate order on whether the export duty levy is applicable on consignments on which shipping bills were issued before the duty imposition was notified. The court also said it would next hear the case on 15 November.

“We do not intend to go into the question of whether the petitioners (exporters) are liable to payment of export duty, at this stage," the court said in its order issued on Tuesday.

The court, however, asked the exporters to furnish a bank guarantee for 40% of the export duty within a week. Customs had argued that there should be some security for the goods exported without paying 20% export duty.

Queries sent to the ministries of commerce and finance on Friday remained unanswered till press time.

The sudden policy change had caught the exporters, shippers, and shipowners by surprise, and the cost of consignments went up sharply overnight. The government allowed exports of the rice consignment that were in transit till 30 September, but exporters said that they were struggling to pay the duty on a low-margin commodity.

PJS Overseas Ltd, AVI India International LLP, and MFG Overseas Pvt Ltd had challenged in the Andhra Pradesh high court the 20% duty on rice exports that was imposed on 9 September.

The counsel for the exporters argued that the rice to be exported reached Visakhapatnam port much before the date of (duty) notification and the process of loading had also commenced. Shipping bills and letter of export orders were issued much before the date on which the notification came, the counsel said.

The counsel also argued that, if no interim order is passed, there is every possibility of the ship leaving the port, which will put irreparable loss on the petitioners.

The ministry of consumer affairs, food and public distribution on Friday said that the decision to regulate rice exports was taken to lower prices and keeping in mind the food security of the country. Earlier, India had banned wheat exports after severe heat waves in March.

The government said it has not made any change in the policy relating to par-boiled rice so that farmers continue to get good remunerative prices. Further, dependent and vulnerable countries will have adequate availability of par-boiled rice as India has a significant share in the global rice export, it said.

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