Business Daily from THE HINDU group of publications
Monday, Jun 04, 2007
ePaper
Business Daily from THE HINDU group of publications Monday, Jun 04, 2007 ePaper |
|
|
|
|
|
|
|
|
|
|
Home Page
-
Oilseeds & Edible Oil Agri-Biz & Commodities - Exports & Imports Industry & Economy - Excise and Customs Duty cuts on edible oils not benefiting consumers Harish Damodaran
New Delhi June 3 It may seem ironical: In recent times, whenever the Centre has reduced import duties on edible oils or announced sops for sugar exports, the ultimate beneficiary has been the foreign supplier or buyer and not the Indian consumer or farmer. Take crude palm oil (CPO), on which the effective import duty has been gradually reduced since last August from 88.8 to 51.5 per cent. Initially, the basic customs duty (BCD) on CPO was 80 per cent, which, along with a 2 per cent education cess and 4 per cent special additional duty (SAD, computed on 180), added up to 88.8 per cent. On August 11, the BCD was cut to 70 per cent, effectively translating into 78.2 per cent. The BCD was again slashed to 60 per cent on January 25, bringing down the effective duty on CPO to 67.6 per cent. In his 2007-08 Budget, the Finance Minister, Mr P. Chidambaram, dispensed with the SAD on edible oils, while raising the education cess to 3 per cent. The result: the effective duty fell further to 61.8 per cent. With the last cut in the BCD to 50 per cent on April 13, the effective import duty on CPO is now 51.5 per cent. In crude de-gummed soybean oil, the BCD was maintained all through at 45 per cent. But with the SAD abolition, there has still been an effective import duty reduction from 50.8 to 45 per cent since March 1. What is significant, however, is that the duty cuts have meant little for the consumer, as the average landed price of CPO has gone up from $490 per tonne in August to $777 in May (currently, they are ruling at $830). In fact, imported CPO prices have risen much sharper than soya oil, despite duties not coming down as much for the latter. Neither have the duty cuts benefited the Centre. While for other commodities, higher international prices generate additional customs revenues, this is not so for edible oils, where duties are levied on `tariff values'. Given that the tariff value or base price on CPO has been kept unchanged at $447 per tonne since July 31 and at $580 per tonne for soya oil since September 15, the import duty reductions have actually led to loss of revenue for the exchequer. The only gainers, then, have been suppliers in Malaysia or Argentina, who have reacted to every round of duty reduction here by jacking up their export prices. And being the world's largest edible oil importer and consumer has not really helped.
More Stories on : Oilseeds & Edible Oil | Exports & Imports | Excise and Customs
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2007, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|
