With cheaper import of refined palm oil hitting the business of local vegetable oil refiners, the Solvent Extractors Association has demanded an increase in import duty on refined oil to 12.5 per cent.
At present, the import duty on refined vegetable oils is 7.5 per cent, while it is 2.5 per cent on crude vegetable oils. The duty difference between these two oils is only 5 per cent.
“SEA has strongly once again represented to the Government to kindly consider immediately to raise the import duty on refined oil by 5 per cent to 12.5 per cent to bail out the domestic refiners from disaster,” SEA President Vijaya Data said in a statement today.
The narrow duty differential between refined palmolein and crude palm oil has further led to large-scale import of refined palmolein, thereby resulting in under-utilisation capacity of the refining industry in India, he said.
The Mumbai-based SEA said that its demand is in line with the recommendations made by the Economic Survey and Tariff Commission to have a duty difference of 10 per cent between the two kinds of vegetable oils.
Import of refined palmolein increased to 1,37,407 tonnes in March against 1,16,237 tonne in the previous month, SEA data showed.
The industry body said that raising the import duty of refined oils will enable the Government to earn extra revenue, part of which can be utilised to subsidise the sale of palm oil via ration shops whenever needed.
The fund can also be utilised for the development of oilseeds and oil palm development programme, it added.
SEA also demanded the Government to extend duty-free import of oilcakes, used as animal feed, beyond March 31, and include rice bran, palm kernel cake and copra cake in the basket of oilcakes.