Cess on rare earth to safeguard local industries

Export cess on rare earth and mineral sand were introduced to safeguard domestic industries.

"To safeguard domestic industries and to ensure a continuous supply of raw materials for local industries, we introduced exports cess on selected items," said Industry and Commerce Minister Rishad Bathiudeen during the Budget debate in Parliament.

Minister Rishad Bathiudeen tours the INOAC Polymer Lanka manufacturing facility at the BOI zone in Horana.

Minister Bathiudeen said, "Taking into consideration the requests made on behalf of industrialists, the cess was increased on several items such as fresh, preserved, dried vegetables and fruits and other vegetable and fruit products (to protect the local processed food industry), edible oils, margarine, sausage or preserved meat products, honey and jaggery, confectioneries, bakery products, food preparations, mineral water, vinegar and salt. "To safeguard domestic industries, ensure a continuous supply of raw materials for local industries and encourage the export of value added goods by discouraging the export of items in raw form, the cess on cinnamon, cloves, natural sand, quartz, clay, phosphate stones (emery, corundum), stones (gravel, pebbles), mica, steatite, ilmenite, rutile, titanium, zirconium, niobium, tantalum and vanadium was increased, to facilitate domestic industries.

"Also exempted from the payment of excise duty are locally assembled and manufactured motor vehicles and electrical items under the HS headings 84 and 85, which achieve a Local Value Addition (LVA) of above 30%.

"From the time that the first batch of vehicles was granted duty exemption in 2008, seven companies have ventured into the automobile assembly industry with 17 models of vehicles being assembled by the seven local companies totalling over 6,000 vehicles with a LVA exceeding 30%."

"Our actual recurrent expenditure up to September 30, 2013, stood at Rs 374.92 million, which is a utilisation rate of 66%. Our capital expenditure up to September 30, 2013, stood at Rs 518.6 million, which is a utilisation rate of 31%. The total actual expenditure of recurrent and capital is Rs 893.5 million up to September 30, 2013.

"These funds were used by my Ministry's divisions, departments, funds and projects - among them were the Industrial Policy and Development Division, Regional Industrial Development Division, Development Divisions 1, 2 and 3, the Productivity Improvement, Industry Registration and Management Information Division, National Authority for the Implementation of Chemical Weapons Convention, Corporations and Statutory Boards Division and organisations under it, Small and Micro Industries Leader and Entrepreneur Promotion Project III Revolving Fund (SMILE III Revolving Fund), Textile Industry Development Division, Department of Textile Industries (DTI), the Department of Commerce (DOC), Department of Registrar of Companies, National Intellectual Property Office and the Sri Lanka Export Development Board," the Minister said.