I generally agree in the view expressed as a piece of political and economic theory that all-duties, import or export or otherwise, belong to the State and as such belong to the Government of India. As a piece of theory, it is unimpeachable, but I am afraid the Drafting Committee in the later stages of its confabulations lost its gear and brought about a proposition, which, though apparently innocent, is a grave menace to the whole taxation structure of the province now known as West Bengal. It will also affect to some extent the finances of other jute-growing units such as Bihar, Assam and Orissa, but in the case of Bengal, it will be a serious menace. Let me at once tell the House that when I make these observations on this particular duty, I do not at all stand before the Drafting Committee with folded bands. I am on very strong ground. In the first place. I would like to tell the House that there is a long history behind this jute duty. It is not as simple as Dr. Ambedkar sought to make it out. The jute duty was imposed first as a war measure in the year 1916, and from that year onwards up to the year 1936 the proceeds of the duty were of the order of four crores of rupees a year. When this tax was first imposed, it was generally believed that it was imposed, to raise finances for the effective prosecution of the First World War but that it would be discontinued at the earliest possible moment after the termination of the war. Sir, as everyone, knows Government is a particular type of institution which once it imposes a tax, does not let go its hold on it easily. This jute duty came in for elaborate examination at the Third Round Table Conference and there it was very clearly made out that this was not an ordinary type of tax at all. According to the Taxation Inquiry Committee, export duly could not be imposed if the commodity on which the duty was sought to be imposed was a monopoly one in the first place and secondly if the levy was on a small. These were the criteria laid down by the Taxation Inquiry Committee. Now, till 1936 jute was practically a monopoly of the province of Bengal. Therefore, the Government of India had some justification in accordance with the Taxation Inquiry Committee’s report, to levy tax on jute in Bengal. But it was pointed out at the Third Round Table Conference, and the point was discussed at very considerable length, as to whether or not the export duty on jute was justified at all Sir, I do not want to go to great details but I would refer to one or two questions that were raised at the Third Round Table Conference. The question was raised by the Honourable Sir Nripendra Nath Sircar, the late Law Member of the Government of India, who interrogated Sir, Edward Benthall, Chairman of the Chamber of Commerce, Calcutta. Sir, Edward Benthall was also Leader of the House in the Central Legislature in the year 1946. In the course of this question and answer, it was established beyond doubt that it was a discriminatory tax-I ask the House to bear that in mind a discriminatory tax, because this was a tax on the agricultural produce of a particular province; and as you know. Agriculture is a provincial subject, and therefore the jute tax was a discriminatory tax not only from the point of view that it taxed an agricultural commodity, an agricultural product of a particular province but also from the point of view that it taxed only a few provinces as against others. Sir, I would read one or two passages. In reply to question No. 6257 by the late Sir N. N. Sircar at the Third Round Table Conference:–
“What effect does this tax have on the land revenue and the ryot?“