The government on Wednesday, October 13, announced that it has reduced the duties imposed on imported edible oil amid surging crude oil prices around the globe. The move comes just in time for the festive season, as officials fear the growing demand for oil will lead to inflation.
In two notifications issued by the Department of Revenue under the Ministry of Finance, it was announced that the customs duty imposed on crude edible oil such as palm oil, sunflower oil and soybean oil have been cut down to zero.
Meanwhile, the import duty levied on these products has been reduced by 16.5-19.25 per cent in order to keep a check on inflation of edible oil during the festive season. The import duty levied on refined oils such as RBD palm oil, soybean and sunflower has also been reduced and set at 17.5 per cent.
Moreover, the government has also agreed to reduce the Agriculture Infrastructure and Development Cess (AIDC) on crude palm oil (CPO) to 7.5 per cent from 20 per cent, and on crude soyabean oil and crude sunflower oil to 5 per cent from 20 per cent.
Adding all these reductions and cuts in customs duty, import duty and AIDC, the Solvent Extractors’ Association (SEA) of India estimates the duty levied on crude palm oil to be 8.25 per cent from the prior value of 24.75. Subsequently, the duty levied on crude soybean oil and sunflower oil will be 5.5 per cent, reduced from the earlier value of 24.75 per cent.
The effective duty, taking into account all the deductions, will be 19.25 per cent on RBD palm oil, refined soybean and sunflower oil.
The new percentage of duties levied on edible oil will come into effect starting October 14 and will remain in place until March 31, 2022. Sources have also stated that two more duty cuts would be announced by the government before the end of the month.