The Hindu Business Line : ‘Palm oil import duty 45%’

New Delhi, July 25 The Finance Ministry has clarified the basic customs duty (BCD) on crude palm oil and crude olein stands at 45 per cent and not 40 per cent, as was notified earlier on Monday.

In a corrigendum issued here on Wednesday, the Revenue Department has informed that the 40 per cent rate notified on July 23 should be ‘read’ as 45 per cent. Taking into account the 3 per cent education cess levied on the BCD, the effective import duty on crude palm fractions would now stand at 46.35 per cent.

Prior to July 23, the BCD on CPO was 50 per cent, while being 57.5 per cent in the case of RBD (refined, bleached, de-odourised) palm oil and olein. The latter has now been reduced to 52.5 per cent. The Dr Ashok Lahiri Committee on Edible Oils had recommended a BCD differential of 7.5 percentage points between crude and refined oils.

“If the CPO duty had been set at 40 per cent, it would have translated into a differential of 12.5 percentage points over RBD palmolein. Now that the Ministry has clarified the duty at 45 per cent, it restores the recommended 7.5 percentage points differential,” officials said.

Meanwhile, the landed price (cost & freight, Mumbai) of CPO has gone up from $805 to $815 per tonne since the latest round of duty reduction effected on July 23. Thus, the duty cut, rather than making imported oil cheaper to Indian consumers, has only led to a further firming up of international prices.

However, in the case of de-gummed soyabean oil, the landed price has actually come down from $880 to $877 per tonne.

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