The government on Monday reduced basic customs duty on refined palm oil from 17.5 per cent to 12.5 per cent, as part of efforts to increase domestic supplies and reduce retail prices of cooking oil.
The revised Basic Customs Duty (BCD) will be effective till the end of March 2022.
The latest move also comes on a day when the government decided to allow traders to import refined palm oil without a license till December 2022 and the market regulator banned the launch of new derivatives contracts for crude palm oil and some other agricultural commodities. Gave.
All these measures have been taken at a time when inflation is at its peak.
The Central Board of Indirect Taxes and Customs (CBIC) has issued a notification that seeks to “reduce the BCD on refined palm oil and its fractions from 17.5 per cent to 12.5 per cent by March 31, 2022”. The new rate has come into effect from Tuesday.
According to BV Mehta, executive director, Solvent Extractors Association of India (SEA), with the reduction in duty, the effective levy on both refined palm oil and palmolein will come down from 19.25 per cent to 13.75 per cent, which includes social welfare cess.
Average retail prices of groundnut oil remained on Monday 181.48 per kg, mustard oil 187.43 per kg, vegetable at 138.5 per kg, on soybean oil 150.78 per kg, on sunflower oil 163.18 per kg and palm oil 129.94 per kg as per the data available with the Ministry of Consumer Affairs.
On duty cut, Mehta said import of refined palm oil will increase as the duty differential with crude palm oil (CPO) has come down to just 5.5 per cent. The current effective duty on CPO is 8.25 per cent.
Earlier in the day, Finance Minister Nirmala Sitharaman told the Lok Sabha, “We will look into the problem of edible oil price and some essential food items.”
To check the prices of edible oil, the government has cut import duty on both refined and crude edible oils several times this year. The last cut in import duty was done by the government on October 14.
Mehta also said that the cut in duty will hurt domestic palm oil refineries.
Earlier in the day, the commerce ministry said traders would be allowed to import ‘refined bleached deodorized palm oil’ and ‘refined bleached deodorized palmolein’ without license for one more year till December 2022.
According to the SEA, India’s dependence on imports of edible oils accounts for about 65 per cent of its total consumption of around 22-22.5 million tonnes. The country imports 13-15 million tonnes to bridge the gap between demand and domestic supply.
For the last two marketing years (November to October), due to the pandemic, imported quantities declined to around 13 million tonnes.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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