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Panel for rollback of excise duty on packaged edible oil

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NEW DELHI, April 16

THE Standing Committee on Food, Civil Supplies and Public Distribution System has suggested the rollback of the eight per cent excise duty on sale of packaged edible oils proposed in the Union Budget 2003-04.

In analysing the demands for grants of the Ministry under its care the Committee in a report tabled by its Chairman, Mr.Devendra Prasad Yadav in Parliament recently stated that the proposal to levy eight per cent excise duty would lead to an immediate increase of Rs 4-5 per litre in the retail prices of packed oil and encourage the sale of edible oil in loose form. This would also increase the sale of crude palm oil in loose form without proper processing.

Pointing out that this step is in "contradiction" to the promulgation of Edible Oils Packaging (Regulation) Order, 1998, the Committee said it was unable to comprehend the rationale behind it because at one point of time the Government itself promulgated the order for sale of packaged edible oil to avoid incidences like dropsy and at the other end encourage sale of loose edible oil by recent increase of excise duty.

The Committee cautioned the Government "everything cannot be taken for granted in the name of revenue. If the Government is so keen on realising funds, this can be done by increasing import duty on crude palm oil to the extent it serves the purpose of the Government". As such, it said that by taking up the matter with the Ministry of Finance and other concerned agencies, the recent increase in excise duty on packaged edible oil be withdrawn and the Government could realise revenue by alternative means.

The Committee said the domestic availability of edible oil from all sources is 61.33 lakh tonnes. The projected demand during 2003-04 is 193.47 lakh tonnes, it said adding that the Government is well aware of the continuous gap in demand and supply of edible oils for the last several years. It, however, noted that the Government is not "very much serious about increasing the domestic production of edible oils and think it better to depend on imports".

The Committee said that all efforts made by Technology Mission on oilseeds, oil seed production programme (OPP) and Oil Palm Development Programme (OPDP) are not sufficient in the present context.

It said that even the R.D.Kapoor Committee Report on production of red oil palm in Andaman and Nicobar Islands and other potential areas has not yet been implemented and urged the Government to enhance indigenous production of oilseeds and achieve self-sufficiency in that area.

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