Agri Business

Slash GST on mustard seeds and oil, says COOIT ahead of GST meet

Our Bureau New Delhi | Updated on May 24, 2021

Urges the government to remove 5 per cent GST for the benefit of both farmers as well as consumers

Ahead of Goods and Services Tax (GST) Council meeting later this week, the Central Organisation for Oil Industry and Trade (COOIT), an apex body of vegetable oil and oilseeds sector, on Monday urged the government to remove 5 per cent GST on mustard seeds and mustard oil for the benefit of both farmers as well as consumers.

“This GST component on an average is ₹7-8,” it said, while participating in a virtual meeting stakeholders of the edible oil sector convened by the Department of Food and Public Distribution.

Participating in the meeting, COOIT Chairman Suresh Nagpal said COOIT was not in favour of reducing import duty or removing agri cess from edible oils as this will discourage farmers from sowing oilseeds during the coming kharif season, besides fostering mistrust towards industry and trade.

Also read: Veg oils import rises by 32% in April

Davish Jain, chief of Soyabean Processors Association of India, also agreed and said the reduction in import duty or agri cess will only be a short-term measure in arresting surge in edible oil prices, which has been in past one year. “The price rise in India was because of sharp rise in global prices and decrease oilseeds production. This shows how vulnerable we are to insulate ourselves from such changes in international market even with one crop failure overseas since we have not developed enough indigenous production base,” Jain said.

Create buffer stock

COOIT also called for the government creating a buffer stock of edible oils by purchasing it from Indian manufacturers for distributing it through public distribution system to BPL card holders as well as for market intervention, if required.

COOIT also wanted the government to ask SEBI, NCDEX, and MCX to bring down circuit limit on oilseeds and Oil adding that international edible oil prices have come down in last one week and this effect will be seen in Indian market in next one week to 10 days. Jain also agreed that heavy speculation at the commodity futures market is culprit and called for a strict vigil on the working of these futures markets. As an example he pointed out that the increase in the the prices of soyabean is more than the increase in prices of the oil.

Also read: Model mustard farms: Evaluation report finds 50% higher productivity

Jain said there has been 10 to 15 per cent reduction in the prices of all commodities in the international market and further price correction is on the cards with oilseed crushing is picking up in major producing countries such as Malaysia, Indonesia, Argentina and Brazil. Nagpal also said the effect of the drop in the global prices will be visible in the domestic market within one week to 10 days.

The Department convened the coordinate efforts to ensure availability of edible oils at reasonable prices.

Addressing issues

Speaking on the occasion, Food Secretary Sudhanshu Pandey said it was important to understand the issues that are contributing to price rise and discuss the same with all the stake holders so that appropriate strategies can be formulated to address the issue of edible oil prices.

The need to hold the meeting was also felt because the Centre got concerned about more than proportionate rise in the prices of edible oil in India as compared with the rise in international prices of edible oil during the last few months. India depends on imports to meet 60 per cent of its edible oil requirement.

Published on May 24, 2021

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