Energy News Today

cooking oil: Government cuts import duty on cooking oils

The government cut import duty on crude and refined palm oil, soybean oil and sunflower oil to provide a respite to consumers amid rising food prices ahead of the consumption-driven festive season.
In a notification issued late on Friday, the Central Board of Indirect Taxes and Customs (CBIC) notified the changes in customs duty rates, applicable from September 11.

The effective import duty — including the base rate and various other taxes — on crude palm oil, crude sunflower oil and crude degummed soybean oil has been reduced to 24.75% from 30.25%. Duty on RBD palmolein and refined soybean oil has been reduced to 35.75% from 41.25%.

Basic customs duty on crude palm oil has been reduced to 2.5% from 10% earlier, while that on crude soya oil has been reduced to 2.5% from 7.5% earlier. Import duty on refined grades of palm oil, soybean oil and sunflower oil has been cut to 32.5% from 37.5%. In a separate notification, the government increased the agriculture infrastructure and development cess on crude palm oil to 20% from the earlier 17.5%.
The move will reduce prices, experts said. “This duty reduction can help in cooling down the edible oil prices by Rs 2-3/litre in the coming weeks as some of the benefits of the duty cut will be absorbed by an increase in prices in the countries of origin that export edible oils to India,” said BV Mehta, executive director, Solvent Extractors’ Association of India.

The move comes in the wake of prices of mustard, vanaspati, soya and palm oil having increased almost 30% while that of sunflower oil has risen by more than 40% over last year. The government expects prices to cool down soon on the back of these measures and arrival of the kharif crop.

Oil and fats retail inflation in July was 32.53% compared with 6.65% in January. India is the largest importer of vegetable oils and more than 65% of the domestic demand is met through imports.

Sunset Clause Removed

India buys palm oil from Indonesia and Malaysia while soya oil and sunflower oil are imported from Argentina, Brazil, Ukraine and Russia. The government has also removed a sunset clause that would have come into force from September 30. This means the import of cooking oils at reduced rates would continue even in October and beyond.

The lower duty regime introduced in July would have automatically ended on September 30, reversing the duties to what they were in February. The sunset clause was introduced to avoid cheaper imports during the kharif harvest period, which could dampen prices that farmers get.

“As the sunset clause has been removed, the reduced duties will continue even in October and beyond till the government takes the next decision,” Mehta said.

On June 29, the government had cut duties on cooking oils and made the import of refined palm oil free.

The decision to further lower the duties is part of a series of policy decisions taken this week to cool cooking oil prices during the ongoing festive season.

According to the Department of Revenue, the duty cuts already made entail an estimated revenue loss of Rs 3,500 crore in a full year. The latest reduction will result in an additional loss of about Rs 1,100, taking the total to Rs 4,600 crore.

The central government has constituted a committee and brought container clearance time down to 3.4 days for edible oils, the government said.

Read More: cooking oil: Government cuts import duty on cooking oils

2021-09-11 20:36:00

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy
%d bloggers like this: