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Our Bureau

Mumbai , June 14

THE Solvent Extractors' Association of India (SEA) has urged the Union Government to remove excise duty on refined edible oils.

"While rest of essential commodities are exempted from the excise duty, refined edible oil is being singled out and taxed resulting into lower realisation for oilseeds produced by the farmers and at the same time, the consumers have to pay higher price to edible oils," said Mr D.P. Khandelia, President of SEA.

In a pre-budget Memorandum for vegetable oil & oilseed sector 2004-2005 submitted to the Union Finance Ministery, Mr P. Chidambaram, the Union Food and Agriculture Minister, Mr Sharad Pawar, and the Commerce and Industry Minister, Mr Kamal Nath, the SEA President urged that the Government to hike the import duty on refined palmolein to 85 per cent. This would arrest the fall in price and sustain the tempo of farmers to increase the oilseed production. It would also ensure the minimum support price/remunerative price of oilseeds to the farmers during the harvesting season.

Mr Khandelia added that this would also create a duty difference between crude and refined oil and would discourage the import of refined oil. Farmers and industry would be benefited by raising duty on palm products, which constitutes 80 per cent of the total country's imports. The association also requested an exemption on non-conventional refined oils from rice bran, tree-borne oilseeds and cottonseed and its by-products from excise duty to promote the production of vegetable oils from the domestic non-conventional sources.

The Government should also create `Oilseed and Oil Development Fund' for the purpose of increasing oilseed yield and production in the country, he suggested.

"After severe drought faced by our country in 2002-03,last year (2003-04), we had normal rain and oilseed crop has gone up to 240 lakh tonnes, equivalent to 65 lakh tonnes of edible oil, yet we will have to import 40-45 lakh tonnes edible oils to meet our requirement. It is, therefore, very essential to increase the availability of edible oils from domestic resources by encouraging diversification, increase productivity and exploitation of non-traditional domestic sources. This will improve capacity utilisation, increase production, productivity thereby bring the industry to be fully competitive in the international market," Mr Khandelia said.

The SEA also urged the Government to withdraw the excise duty on food grade hexane or at least reduce to 16 per cent at par with other petroleum products to give some relief to this export-oriented industry operating at 30 per cent to 35 per cent capacity only.

The domestic turnover of the vegetable oil industry is Rs 70, 000 crore and the import-export turnover of about Rs 15,000 crore per annum, consist of Rs 10, 000 crore for import of edible oils & Rs 5,000 crore for export of oilmeals, oilseeds, castor oil, groundnut oil & vegetable fats of tree borne oilseeds.

More Stories on : Oilseeds & Edible Oil | Excise and Customs | Budget

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