BackGovt scraps basic customs duty, cuts agri cess on crude palm, sunflower oil
Duty cuts will be effective from 14 October till 31st March next year, the CBIC said in a notification
PremiumThe Centre on Wednesday scrapped basic customs duty and slashed agri cess on crude varieties of palm, soyabean and sunflower oil till March 2022. The move is expected to bring down prices and increase domestic availability in the festive season.
The duty cuts will be effective from 14 October till 31st March next year, the Central Board of Indirect Taxes and Customs (CBIC) said in a notification.
With this slash, crude palm oil will now attract agri infrastructure development cess (AIDC) of 7.5%, while the rate will be 5% for crude soyabean oil and crude sunflower oil.
The effective customs duty on crude varieties of palm will be 8.25% from 24.75% earlier. "Import duty on crude palm oil has gone down by 16.5% but Indian consumers won't get the entire benefit of the duty reduction. Indonesian and Malaysian supplier are likely to raise prices responding to the duty cut," B.V. Mehta, executive director of Mumbai-based Solvent Extractors’ Association of India (SEA) said.
Effective duty on crude soyoil and crude sunflower oil has fallen to 5.5% from 24.75%, while refined palm oil, refined soyoil and refined sunflower oil face a 19.25% import tax against 35.75% earlier, the SEA said in a statement.
India fulfils more than two-thirds of its edible oil demand through imports and has been struggling to contain a rally in local oil prices for the last few months.
The country imports palm oil mainly from top producers Indonesia and Malaysia, while other oils, such as soy and sunflower, come from Argentina, Brazil, Ukraine and Russia.
"Duty cut would bring down local edible oil prices but could hurt local oilseed farmers since harvesting of soybean and groundnut has started," Mehta said.
Local soyoil, soybean and palm oil futures fell by as much as 6% after the duty cut announcement.
(With inputs from Reuters)
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