NE BUSINESS BUREAU
NEW DELHI, SEP 11
The government has slashed base custom duties on palm oil, soyoil and sunflower oil to ease elevated level of edible oil prices, according to the Finance Ministry.
The base import tax on crude palm oil has been reduced to 2.5 percent from 10 percent, while the tax on crude soyoil and crude sunflower oil has been reduced to 2.5 percent from 7.5 percent, the Finance Ministry said in a notification issued late on Friday.
The notification came into effect from Saturday.
According to Solvent Extractors’ Association of India (SEA) executive director B V Mehta, “With the reduction, the effective duty on crude palm oil, crude soyoil and crude sunflower oil will come down to 24.75 percent whereas effective duty on refined palm oil, soyoil and sunflower oil will be 35.75 percent.”
The fresh round of cut could bring down the retail prices by Rs 4-5 per litre, he said, adding, it is also generally seen that prices harden in international market after India reduces its import duty so the real impact could be Rs 2-3 per litre only.
The government should have reduced import duty on mustard oil as well to cool prices, he added. In the last few months, the Centre has cut import duty on various edible oils and asked states to take details of stock of edible oils and oilseeds from wholesalers, millers, refiners and stockists. It has also announced a Rs 11,040 crore-palm oil mission.
According to industry body Solvent Extractors’ Association of India (SEA), total import of vegetable oils (edible and non-edible oil) during November 2020 to July 2021 fell by 2 percent to 96,54,636 tonne, compared to 98,25,433 tonne in the corresponding period of the previous oil year (November-October).
The Central Board of Indirect Taxes (CBIC) last month had halved the basic customs duty on crude soyoil and sunflower oil to 7.5 percent to boost supply.
Edible oil is India’s third-largest imported commodity after crude oil and gold.
The duty cuts already made entail a sizable loss of revenue (estimated to be about Rs.3500 crore in a full year). With the current/latest reduced import duty it would result in additional loss of about Rs.1,100 crore in a full year taking the total loss around of Rs 4,600 crore as per the Department of Revenue, GoI.
