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FinMin put off customs duty on edible oil imports till March 2023

FinMin put off customs duty on edible oil imports for next March 2023

FinMin put off customs duty on edible oil imports for next March 2023

Finance Ministry Nirmala Sitharaman has put off paying customs duty on edible oil imports for another 6 months, until March 2023. This is done to increase the supply of edible oil in the country and keep prices down.

In a notification, the Central Board of Indirect Taxes and Customs (CBIC) said that the existing concessional import duties on certain edible oils will be extended until March 31, 2023.

Solvent Extractors’ Association of India (SEA) said that the current duty structure for crude palm oil, RBD Palmolein, RBD palm oil, crude soybean oil, refined soybean oil, crude sunflower oil, and refined sunflower oil will stay the same until March 31, 2023.

At the moment, there is no import tax on crude palm oil, soy oil, and sunflower oil. But when you add in the 5% agri cess and the 10% social welfare cess, the effective duty on crude versions of these three edible oils is 5.5%.

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Customs duty on refined palmolein and palm oil is 12.5%, and there is a 10% ‘social welfare cess’ on top of that. So the actual tax rate is 13.75%.

The basic customs duty on refined soyabean and sunflower oil is 17.5%. When the 10% social welfare cess is added, the effective duty is 19.25%.

SEA Executive Director BV Mehta said that the decision to extend concessional duty until March was made by the government to help consumers.

He did say, though, that the government will have to look at the duty structure again in October when crops like soyabean from the Kharif season hit the domestic market.

Mehta said that the price of edible oil has been going down because prices around the world have been going down.

‘Farmers would want their oilseed crop to be worth at least 15% to 20% more than the minimum support price (MSP). So, if wholesale prices go below MSP or stay close to MSP, the government should think about raising import taxes on edible oil’ he said.

With rates going down on the global market and import duties going down, the prices of edible oils in the domestic market have gone down a lot. But the prices are still too high for most people to afford.

In the last few months, the food ministry told companies that make edible oils to share the benefits of falling prices around the world with people in their own countries.

On September 1, the average retail price of groundnut oil was ₹188.04 per kilogramme, mustard oil was ₹172.66 per kilogramme, Vanaspati was ₹152.52 per kilogramme, soyabean oil was ₹156 per kilogramme, sunflower oil was ₹176.45 per kilogramme, and palm oil was ₹132.94 per kilogramme.

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Last year, prices for edible oils were high, so the government cut import taxes on palm oil several times to make more of it available in the country.

Since India imports, more than 60% of the edible oil it needs, prices at the store have gone up in the last few months, following the lead of the global market. In the 2020-21 oil marketing year, which ended in October, India imported a record amount of edible oil, worth ₹1.17 lakh crore.