The Hindu Business Line : Plea to exempt refined rice bran oil from excise duty

WHILE manufacture of refined vegetable oils is subject to excise duty at the rate of Rs 1,000 a tonne, the solvent extraction industry has made out a case for exempting refined rice bran oil from such levy.

The pre-budget memorandum of the Solvent Extractors' Association of India (SEA) has argued in favour of keeping refined rice bran oil out of excise duty regime in order to exploit the production potential of this non-conventional oil.

At the same time, there are reports expressing apprehensions that unscrupulous players in the industry may take undue advantage of exemption granted to the oil by making false declaration.

Keen to lay such fears to rest, industry representatives point out that under the extant scheme of production and marketing of rice bran oil, it will not be commercially viable and practically feasible for any solvent extraction unit to fabricate documents.

Refined rice bran oil can be produced only from solvent extracted rice bran oil raw grade I, which is produced by solvent extraction plants that are licensed by the Directorate of Vanaspati, Vegetable Oils and Fats under the Ministry of Food and Consumer Affairs.

Mr Ashok Sethia, SEA's East Zone chairman, has pointed out that under the SEO Control Order, trading or free movement of solvent extracted oil raw grade I is not allowed. It is mandatory that such goods be dispatched to a registered refinery or vanaspati plant. Therefore, it will not be possible for traders to provide bogus bills of this raw material, he has argued. In addition, sales tax is leviable on rice bran, its oil and meal.

Consumption of utilities such as power, steam and hexane will also have to be shown. All these make evasion of excise duty impossible, it is pointed out.

Mr B.V. Mehta, executive director, SEA, told Business Line that instead of burdening with excise duty, production and consumption of refined rice bran oil deserves to be encouraged with incentives as the production potential has remained largely untapped.

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