Levy of market fees.-

2[(1) x x x]

¹ Substituted by Act 24 of 1975 w.e.f.19.5.1975.

² Omitted by Act 17 of 1980 w.e f. 28.9.1978.

1. (2) The market committee shall levy and collect market fees from every buyer in respect of agricultural produce bought by such buyer in the market area, at such rate as may be specified in the bye-laws 1[(which shall not be more than two rupees per one hundred rupees of the value of such produce bought except in case of livestock where the market fee shall not be more than 2[five rupees per head] of cattle other than sheep or goat, and in the case of sheep or goat such fee shall not be, more than 2[one rupee per head] )] in such manner and at such times as may be specified in the bye-laws. 3[Provided that in the case of any co-operative society doing business in agricultural produce within a market yard, market fee shall be levied and collected at the rate of eighty per cent of the market fee payable under this Act.] 1[Provided further that, if on any agricultural produce market fee has already been levied and collected under sub-section (2) in any market area within the State and such agricultural produce is processed and sold in any other market area within the State or

¹ Substituted by Act 4 of 1982 w.e.f.4.11.1981

² Substituted by Act 16 of 1991 w.e.f.1.8.1991

³ Inserted by Act 16 of 1991 w.e.f.1.8.1991

exported out side the State it shall be exempted from the levy of market fee.

1[Provided also that in case of a buyer in a spot exchange established by a licencee or a licencee for direct purchase of notified agricultural produce or a contract farming sponsor buying from a contract forming producer, market fee shall be levied and collected at the rate of seventy percent of the market fee payable under this Act.] 2[

Provided also that in case of any private markets established under section 72A of the Act, market fee shall be levied and collected at the rate of thirty three percent of market fee payable under this Act, provided that no market fee is leviable on flowers, fruits and vegetables. Instead the Market committee may collect user charges in respect of the above articles, user charges for such services provided by the Market Committee from the buyer of the produce at such rates as may be specified in the bye-laws as approved by the Director of Agricultural Marketing ]2

¹ Inserted by Act 23 of 2007 w.e.f.16.8.2007

² Inserted by Act 05 of 2014 w.e.f.04.01.2014

Explanation: Nothing in this proviso shall apply to,-

1. (i) any processed agricultural produce imported from out side the State and sold in any market area within the State ; or
2. (ii) any agricultural produce imported or caused to be imported by any person either on his own account or as an agent for another person, from out side the State into any market area within the State for the purpose of processing or manufacturing except for one's own domestic consumption.]

¹ Inserted by Act 22 of 2004 w.e.f. 17.5.2004

1[(2A) The market fee payable under this section shall be realised as follows, namely:-

1. (i) if the produce is sold through a commission agent, the commission agent 2[shall] realise the market fee from the purchaser and shall be liable to pay the same to the committee; 3[(ia) if the produce is sold by an importer to the purchaser, the importer shall realise the market fee from the purchaser and shall be liable to pay the same to the committee;]
2. (ii) if the produce is purchased directly by a trader from a producer, the trader shall be liable to pay the market fee to the committee;
3. (iii) if the produce is purchased by a trader from another trader, the trader selling the produce 2[shall] realiste it from the purchaser and shall be liable to pay the market fee to the committee; and
4. (iv) in any other case of sale of such produce, the purchaser shall be liable to pay the market fee to the committee.]

¹ Inserted by Act 4 of 1982 w.e.f.19.5.1975

² Substituted by Act 35 of 1986 w.e.f.17.6.1986

³ Inserted by Act Act 35 of 1986 w.e.f.17.6.1986

1[(2B) The market fee payable under clauses (i), (ia), (ii) or (iii) of sub-section (2A) shall be paid to the market committee within such time as may be specified in the bye-laws. ]

¹ Inserted by Act 35 of 1986 w.e.f.17.6.1986

2[(3) Notwithstanding anything contained in this Act, if any market committee in the State has already levied and collected market fee under sub-section (2) from a buyer in respect of any agriculture produce as may be specified by the State Government by notification, no market fee shall be levied and collected again in respect of such agricultural produce by any other market committee in the State

² Omitted by Act 17 of 1980 w.e.f. 19.5.1975 and again Inserted by Act 10 of 2001 w.e.f. 7.4.2001

³ Omitted by Act 23 of 2007 w.e.f.16.8.2007

3[XXX] subject to production of such proof as may be prescribed for having collected the market fee] ] 1. Section 65 has been Substituted by Act 24 of 1975 w.e.f.19.5.1975

1[(4) Notwithstanding anything contained in this Act, no market fee is payable for a period of five years by a New Agricultural produce Processing Industries in respect of purchases of agricultural produce by such Processing Industries, in accordance with the Industrial policy of the Government vide Government Order CI 319 SPI 2005, dated 26 th August 2006.] 1. Subsection (4) inserted by Act 23 of 2007 w.e.f.16.8.2007

1[Provided that the existing processing industries who undertake expansion/ modernization/diversification shall also be exempted from payment of market fee, for a period of five years from the date of the commencement of the Karnataka Agricultural Produce Marketing (Regulation and Development)(Amendment) Act, 2011 subject to the following conditions, namely:-

1. (a) a minimum investment of fifty percent of the earlier investment on fixed assets has to be made;
2. (b) the increased production compared to the average of the production made in the previous three years qualifies for exemption under expansion programme;
3. (c) raw material used for production of new product other than existing one will be considered for diversification programme;
4. (d) the existing units which have replaced all the old machineries with the modern machineries under the modernization programme shall be exempted from payment of market fee on the total raw material purchases for processing capacity only;
5. (e) a certificate issued by the Director of Industries and commerce, Government of Karnataka or his nominee certifying that he has fulfilled the above conditions and he is eligible for exemption of fee shall be produced.]

¹ Inserted by Act 18 of 2011 w.e.f.06.04.2011.

1[(5) No market fee shall be payable for a period of five years, four years and three years from the date of the commencement of the Karnataka Agricultural Produce Marketing (Regulation and Development) (Amendment) Act, 2011, in case of new agricultural produce processing industries and existing processing industries who undertake expansion/modernization/ diversification in Zone-1, 2 and 3 respectively as identified under Karnataka New Industrial Policy 2009-2014, published in Government Order No. CI/223/SPI/2008, dated 28.02.2009, on the purchases of agricultural produce as specified in Sl. No.II, III, IV, VI, VII, IX and X of the Schedule appended to the Act directly from farmers, subject to the following conditions, namely:-

1. (i) A minimum investment of fifty percent of the earlier investment on fixed assets has to be made under expansion/modernization/diversification projects.
2. (ii) The increased production compared to the average of the production made in the previous three years qualifies for exemption under expansion program.
3. (iii) Raw material used for production of new product other than the existing one shall be considered for diversification programme.
4. (iv) The existing units, which have replaced all the old machineries with the modern machineries under the modernization programme shall be exempted from payment of market fee on the total raw material purchases for processing capacity only.
5. (v) a certificate issued by the Director of Industries and commerce, Government of Karnataka or his nominee certifying that he has fulfilled the above conditions and he is eligible for exemption of fee shall be produced.]

¹ Inserted by Act 18 of 2011 w.e.f.06.04.2011.

1[(6) Notwithstanding anything contained in this Act, no market fee is payable for a period of ten years by new agricultural produce processing industries,-

1. (a) in respect of purchases of agricultural produce by such processing industries in accordance with the Integrated Karnataka Agri-Business Development Policy-2011 of the Government published in the Governament Order No. AHD 172 AFT 2010, dated: 05.03.2011;
2. (b) on any agricultural produce exported or caused to be exported by any person either on his own account or as an agent for another person from the market area to outside the country; Subject to the production of a certificate issued by the Director of industries and commerce, Government of Karnataka certifying that he is eligible for exemption of fee.] 2[Provided that, no market fee is payable by new agricultural produce processing industries identified under Karnataka New Industrial Policy 2009-14, who have gone into production between the period from 06-04-2011 to 16-03-2013 in respect of purchase of agricultural produce for the extended/ balance period under Integrated Agri-Business Development Policy-2011 as announced in the Karnataka Industrial Policy 2014-19, subject to the production of a certificate issued by the Director of Industries and Commerce, Government of Karnataka, to the effect that the unit is eligible for exemption of fee.] 2[(7) Notwithstanding anything contained in this Act, no market fee is payable for a period of ten years by new agricultural produce processing industries in respect of purchases of agricultural produce by such industries in accordance with the Karnataka Agri-Business and Food Processing Policy-2015 of the Government published in the Government Order No. AGD 94 AMS 2015, dated: 11.12.2015, subject to the production of a certificate issued by the Director of Industries and Commerce, certifying that he is eligible for exemption of fee.]

¹ Inserted by Act 38 of 2013 w.e.f.16.03.2013.

² Inserted by Act 51 of 2020 w.e.f. 01.12.2020