Effective import duty on crude palm oil reduced to 5.5% to soften edible oil prices
The government on Saturday reduced the effective duty on crude palm oil imports from 8.25 per cent to 5.5 per cent, a move that will help control cooking oil prices and support domestic processing companies.
The Basic Customs Duty on Crude Palm Oil (CPO) is already nil and now the Central Board of Indirect Taxes and Customs (CBIC) through a notification has reduced the Agricultural Infrastructure Development Cess from 7.5 per cent to 5 per cent, which is 13 Effective from February.
Taking into account the Agriculture Development Cess and Social Welfare Cess, the effective import duty on crude palm oil will now be reduced from 8.25 per cent to 5.5 per cent. The CBIC, in a notification, has extended the validity of reduction in import duty on crude palm oil and other crude oils by six months till September 30.
Industry body SEA has been demanding that the effective duty difference between crude palm oil and refined palm oil should be 11 percentage points as higher imports of refined oil impact domestic refineries. The effective import duty on refined palm oil is 13.75 per cent.
With edible oil prices remaining high throughout the past year, the government had cut import duty on palm oil on several occasions to increase domestic availability. BB Mehta, executive director of the Solvent Extractors Association (SEA), said the government has reduced the agriculture cess on CPOs from 7.5 per cent to 5 per cent.
“Therefore the effective duty difference between CPO and RBD Palmolein will be 8.25 (percentage points). Also the current fee which was to be revised upwards from 1st April is now extended till 30th September. This means that CPO, Sunflower The effective duty on oil and soybean oil is 5.5 per cent till September 30,” he said.
This is a welcome move but not enough to support domestic refiners. He said the SEA had requested domestic refineries to create a duty differential of minimum 11 percentage points to enable them to operate the refinery economically.
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