Duty cut. Edible oil duty cut to help consumers

The Centre’s move on Friday to reduce the basic customs duty (BCD) on certain edible oils to 2.5 per cent is likely to help the consumers.

The stakeholders in the edible oil sector feel that the Friday’s move by the Government would help reduce the duty by around ₹4180 per tonne on crude palm oil (CPO), around ₹4990 per tonne on crude degummed soyabean oil, and around ₹4330 per tonne on RBD palmolein. They feel that this duty reduction, in turn, would help consumers of these oils.

While reducing the import duty on June 29, the Centre had said that the duty would be effective till September 30.

BV Mehta, Executive Director of Solvent Extractors’ Association (SEA) of India, said it looks that sunset clause has been dropped with Friday’s move by the Centre. As a result of this, there will not be auto revision of duty structure with effect from October 1.

He said the current domestic bullishness in edible oils is spearheaded by low arrival of mustard seed.

In Friday’s meeting with the Food Secretary, SEA had suggested for reduction of import duty on rapeseed oil in line with soya and sunflower oil or even little lower, as it will have desired salutary effect on runaway mustard oil prices.

He said the Centre’s move will also go a long way in cooling all edible oil prices as internationally edible oil prices have started showing some weakness.

Sudhakar Desai, President of Indian Vegetable Oil Producers’ Association (IVPA), said that this is a welcome move in the interest of the consumers who have been facing the brunt of the steeply high prices. This move is expected to provide some relief to the consumers.

Apart from the consumer angle, this move is a possible solution to resolve the zero-duty import from Nepal and Bangladesh. Such imports should get curtailed with this move, helping the domestic industry, especially those in north and northeast of India, he said.

COMMENT NOW