Move in view of rising global prices

This is the third round of revision in edible oil import duties in the current calendar year. On January 25, the BCD on palm oils was slashed from 70 to 60 per cent for crude and from 80 to 67.5 per cent for refined fractions.

Our Bureau

New Delhi, July 23 Despite a bumper kharif oilseed crop in the offing, the Centre has resorted to yet another round of tariff cuts on imported edible oils.

With effect from Monday, the basic customs duty (BCD) on crude palm oil and crude palmolein have been reduced from 50 to 45 per cent, while that for RBD (refined, bleached, de-odourised) palm oil and RBD palmolein being similarly lowered from 57.5 to 52.5 per cent.

Unlike in the previous rounds, the Finance Ministry has also slashed the BCD on soyabean oil — both crude (de-gummed) as well as refined — from 45 to 40 per cent. The cuts for sunflower oil have been even sharper: from 50 to 40 per cent for crude and from 60 to 50 per cent for refined.

import duty

Taking into account the 3 per cent education cess, the effective import duty on crude palm fractions would now work out to 46.35 per cent for crude palm fractions, 54.075 per cent for refined palm oils, 41.2 per cent for crude sunflower oil and 51.5 per cent for refined sun oil. Soyabean oils are exempt from the cess that is levied on the BCD.

This is the third round of revision in edible oil import duties in the current calendar year. On January 25, the BCD on palm oils was slashed from 70 to 60 per cent for crude and from 80 to 67.5 per cent for refined fractions.

In the 2007-08 Union Budget, the Finance Minister, Mr P. Chidambaram, did away with the special additional customs duty of 4 per cent, even while raising the education cess from 2 to 3 per cent. This brought down the effective tariff incidence on crude palm to 61.8 per cent (from 67.6 per cent of pre-Budget), on refined palm to 69.525 per cent (75.6), on soya oils to 45 per cent (from 50.8). Besides, the BCD on crude sun oil was reduced from 65 to 50 per cent and from 75 to 60 per cent on refined sun oil.

On April 13, there was a further cut in the BCD on crude palm oils from 60 to 50 per cent and from 67.5 to 57.5 per cent on refined palm fractions.

tariff reduction

“We were forced to undertake the latest tariff reduction because of the steep rise in international prices, which have more than neutralised the effect of earlier duty cuts,” said a spokesperson of the Central Board of Excise and Customs. Since the Budget, the landed price (cost and freight, Mumbai) alone has gone up from $595-600 to a level of $805 per tonne.

(This article was published in the Business Line print edition dated July 24, 2007)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.