In a statement released on Tuesday, the Central Board of Indirect Taxes and Customs (CBIC) reduced import duty on crude palm oil to 10 percent and other palm oils to 37.5 percent.
In the face of rising inflation and high edible oil costs, the Union Finance Ministry decreased import duties on crude palm oil and other palm products on Tuesday, with the goal of lowering prices in the local market.
With effect from Wednesday, the Central Board of Indirect Taxes and Customs (CBIC) reduced the basic customs duty on crude palm oil to 10 percent and refined palm oil to 37.5 percent in an announcement.
From Wednesday, the effective tax on crude palm oil, which includes cess and other charges, will be 30.25 percent, while the duty on refined palm oil will be 41.25 percent.
“This notification shall take effect on the 30th of June 2021 and shall stay in force until and including the 30th of September 2021,” the CBIC stated.
Currently, the basic customs duty on crude palm oil is 15%, whereas it is 45% for all other palmolein categories (RBD Palm Oil, RBD Palmolein, RBD Palm Stearin, and any Palm Oil other than Crude Palm Oil).
“In order to provide assistance to the people, the government has cut customs duty on crude palm oil from 35.75 percent to 30.25 percent and on refined palm oil from 49.5% to 41.25 percent. This will lower market retail pricing for edible oils,” the CBIC tweeted.
“The government has sought to balance the interests of both consumers and farmers,” said BV Mehta, Executive Director of the Solvent Extractors Association of India (SEA). It would provide immediate aid to the needy, while farmers will be protected because duty will be raised again in October when the harvesting season begins.”
He noted that the reduction in import duty on refined palm oil will have little effect because inward imports are restricted.
In the last year, the price of edible oil in the United States has more than doubled. Imports supply almost two-thirds of India’s edible oil demand.
According to SEA statistics, India’s import of palm oils increased by 48% to 7,69,602 tonnes in May 2021 due to increased crude palm oil exports.
In May 2020, India, the world’s largest buyer of vegetable oils, purchased 4,00,506 tonnes of palm oil.
Total vegetable oil imports in the country increased by 68% to Rs 12.49 lakh tonne in May 2021, up from 7.43 lakh tonne the previous year.
Palm oil accounts for more than 60% of the country’s total vegetable oil imports.
The government decreased the tax value for the import of edible oil, including palm oil, by up to USD 112 per tonne earlier this month, a move that experts predicted would assist slash domestic costs.
According to tax experts, the fall in tariff value could result in a softening of edible oil prices in domestic markets due to the reduction in customs duty payable on the basic import price.
