Govt. 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 cuss 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 / liter 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. S-ET

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