The latest notification of the Central Board of Indirect Taxes and Customs (CBIC) allowing imports of crude soyabean oil and crude sunflower oil at zero basic Customs duty and zero Agriculture Infrastructure and Development Cess till June 30, is likely to help consumers.
The CBIC notification dated May 10 allowed imports of crude soyabean oil and crude sunflower oil at zero Basic Customs Duty and zero Agriculture Infrastructure and Development Cess for TRQ (tariff rate quota) license holders for 2022-23 up to June 30, 2023.
The notification, which came into force on May 11 and applicable till June 30, has prescribed conditions for the exemption. Under this, the importer will need to produce to the Deputy Commissioner or the Assistant Commissioner of Customs, a valid TRQ authorisation for the fiscal 2022-23 allotted by Directorate General of Foreign Trade (DGFT). The TRQ authorisation will be issued electronically by the DGFT and transmitted to ICES system. Imports made against the TRQ shall be allowed only upon debiting electronically in the ICES system, the notification said.
SEA President’s plea
BV Mehta, Executive Director of Solvent Extractors’ Association of India (SEA), told businessline that the government had allowed the import of crude soyabean oil and crude sunflower oil under TRQ of 2 million tonnes each under nil duty for two years in May 2022.
DGFT had announced the discontinuation of TRQ for crude soyabean oil in January with effect from April 1 for the year 2023-24, and for crude sunflower oil in March.
DGFT had issued public notices according to which the validity of TRQ issued during financial year 2022-23 for the import of crude sunflower seed oil and soyabean oil shall be valid for clearance of import for a period till June 30, provided the Bill of Lading date is March 31 or prior.
Earlier, Ajay Jhunjhunwala, President of SEA of India, had informed the SEA members in his monthly letter that the Customs was insisting for Bill of Entry and not accepting the Bill of Lading date. Hence shipments were held up since April 1, 2023.
The association had taken up this issue with the Department of Food and Public Distribution and the DGFT to allow crude sunflower and soyabean oils based on the Bill of Lading date as notified by the DGFT.
Mehta said SEA had told the government that importers have imported based on DGFT notification and those having Bill of Lading prior to March 31 should be allowed. Finally, the Revenue Department under the Union Finance Ministry agreed to this, he said.
Around 90,000 tonnes of shipments that were held up earlier due to the confusion on Bill of Lading and Bill of Entry will be released following this notification. Around 1.25 lakh tonnes of sunflower oil and around 1 lakh tonnes of soyabean oil are in voyage. That means another 2.25 lakh tonnes under voyage will arrive before June 30, he said. It will be under nil duty under TRQ, provided Bill of Lading is March 31 or earlier.
Asked about the impact of these supplies on the market, he said there will be some dampening effect on current price as these imports will be a zero duty one. “Don’t ask me how much it is, but there will be a dampening effect,” Mehta said.