The Hindu Business Line : Actual user condition for industrial grade palm oil

IN order to check the misuse of palm oil (industrial grade), the Government has imposed "actual user" condition for clearance of goods at 20 per cent ad valorem customs duty.

As per notification 20/2004-Customs dated January 16, all oils— other than edible grade— having free fatty acid (FFA) 20 per cent or more and falling under specified headings of the Customs tariff for the manufacture of soap shall be charged to duty at 20 per cent.

When imported for any other purpose, the rate of duty shall be 65 per cent, the Department of Revenue notification said.

With this, the controversy over import of industrial grade crude palm oil at a concessional rate of duty and suspected misuse of the facility should come to an end.

Soap major are relieved that the Government saw their view point and took the most appropriate decision of imposing the actual user condition so that the possibility of misuse is eliminated.

The vegetable oil processing industry had been pressing the Government for raising the duty on crude palm oil to 65 per cent on the ground of rampant misuse.

Whether misuse of industrial grade palm oil will be eliminated or not would, however, depend on strict implementation of the actual user condition, according to a soap company executive. Food laws too have to be effectively enforced against vegetable oil and vanaspati makers who misuse industrial grade oil.