The government has slashed base custom duties on palm oil, soyoil and sunflower oil to ease elevated level of edible oil prices, according to the Finance Ministry.
The base import tax on crude palm oil has been reduced to 2.5 per cent from 10 per cent, while the tax on crude soyoil and crude sunflower oil has been reduced to 2.5 per cent from 7.5 per cent, the Finance Ministry said in a notification issued late on Friday. The notification came into effect from Saturday.
With the reduction, the effective duty on crude palm oil, crude soyoil and crude sunflower oil will come down to 24.75 per cent whereas effective duty on refined palm oil, soy oil and sunflower oil will be 35.75 per cent, Solvent Extractors' Association of India (SEA) executive director B V Mehta told PTI.
The fresh round of cut could bring down the retail prices by Rs 4-5 per litre, he said, adding, it is also generally seen that prices harden in international market after India reduces its import duty so the real impact could be Rs 2-3 per litre only.
The government should have reduced import duty on mustard oil as well to cool prices, he added. In the last few months, the Centre has cut import duty on various edible oils and asked states to take details of stock of edible oils and oilseeds from wholesalers, millers, refiners and stockists. It has also announced a Rs 11,040 crore-palm oil mission.
According to industry body Solvent Extractors' Association of India (SEA), total import of vegetable oils (edible and non-edible oil) during November 2020 to July 2021 fell by 2 per cent to 96,54,636 tonne, compared to 98,25,433 tonne in the corresponding period of the previous oil year (November-October).
The Central Board of Indirect Taxes (CBIC) last month had halved the basic customs duty on crude soyoil and sunflower oil to 7.5 per cent to boost supply.
Edible oil is India’s third-largest imported commodity after crude oil and gold.