FinMin extends concessional customs duty on edible oil imports by 6 months

The Finance Ministry has extended concessional customs duty on edible oil imports by another 6 months till March 2023, a move aimed at increasing domestic supply and keeping prices under control.

In a notification, the Central Board of Indirect Taxes and Customs (CBIC) said the existing concessional import duties on specified edible oils will be extended up to March 31, 2023.

"The current duty structure on crude palm oil, RBD Palmolein, RBD palm oil, crude soybean oil, refined soybean oil, crude sunflower oil and refined sunflower oil remains unchanged till March 31, 2023," Solvent Extractors' Association of India (SEA) said.

Currently, import duty on crude varieties of palm oil, soyabean oil and sunflower oil is nil. However, taking into account agri cess of five per cent and social welfare cess of 10 per cent, the effective duty on crude varieties of these three edible oils is 5.5 per cent.

The basic customs duty on refined varities of palmolein and palm oil is 12.5 per cent, while social welfare cess is 10 per cent. So the effective duty works out to 13.75 per cent.

The basic customs duty on refined soyabean and sunflower oil is 17.5 per cent and taking into account 10 per cent social welfare cess, the effective duty comes to 19.25 per cent.

SEA Executive Director BV Mehta said the government has taken the decision to extend concessional duty till March in consumer interest.

However, he said that the government will need to revisit the duty structure in October when the Kharif oilseeds crops like soyabean come into the domestic market.

Mehta said prices of edible oil have been on declining trend driven by fall in global prices.

"Farmers would want at least 15-20 per cent higher price of their oilseeds crop than the minimum support price (MSP). So if wholesale prices falls below MSP or remain near to MSP then government should look at increasing import duties on edible oil," he said.

With easing of rates in global market and lower import duties, the retail prices of edible oils have come down considerably in the domestic market. However, the prices are still at uncomfortable level for common man.

In the last few months, the food ministry had directed edible oil companies to pass on the benefits of fall in global prices to domestic consumers.

According to the data compiled by the Department of Consumer Affairs, the average retail price of groundnut oil stood at ₹188.04 per kilogram, mustard oil (₹172.66/kg), Vanaspati (₹152.52/kg), Soyabean Oil (₹156/kg), Sunflower Oil (₹176.45/kg) and palm oil (₹132.94/kg) on September 1.

With edible oil prices ruling high throughout last year, the government had on multiple occasions cut import duty on palm oil to increase domestic availability.

As India imports more than 60 per cent of its edible oil requirement, retail prices came under pressure in the last few months taking cues from the global market. India imported a record edible oil worth ₹1.17 lakh crore in 2020-21 oil marketing year ending October.

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