Edible Oil to become cheaper soon as the govt has cut import duty charges to provide relief to consumers amid rising cooking oil prices. Centre on Tuesday reduced the import duty charges on crude palm oil to 10% which will help to bring down retail cooking oil prices in the country.
The Central Board of Indirect Taxes and Customs (CBIC) through a notification announced cut into the basic customs duty on crude palm oil to 10% and refined palm oil to 37.5% with effect from 29th June and will remain in force up to and inclusive of the 30th September 2021.
The effective duty, which includes cess and other charges, on crude palm oil will stands at 30.25%, while for refined palm oil it would be 41.25% from Wednesday.
After the import duty cut, the present tax rate on CPO will be 30.25% including an additional agri-cess of 17.5% + social welfare cess of 10%. Govt has tried to cool off retail edible oils prices.
Demand supply gap
India mainly consumes cooking oils like mustard, soybean, groundnut, sunflower sesame oil, safflower seed, castor, niger seed and linseed (primary source) and coconut, palm oil, cottonseed, rice bran, solvent extracted oil, tree and forest origin oil. Demand for edible oils in the country is around 250 lakh metric tonne (LMT) per annum. The country imports almost 60% of its total demand per year. Key point here is that the prices of edible cooking oil depends mainly on the international crude palm oil prices.
India, is the world’s largest edible oil buyer, had imported about 4,00,506 tonne palm oils in May 2020. Palm oil accounts for more than 60% of the country’s total vegetable oil imports.
Even after putting lot of emphasis domestic oil seeds production haven’t kept pace with the consumers demand; production varied between 24 mt and 32 mt since 2005-06 to 2018-19. However, centre govt push and incentives to produce more and make India import free in oil seeds has shown results. Oil seed production is estimated to be around at an all-time high of 36.57 mt during crop year (July-June) 2020-21, as per the Union agriculture ministry.
During this kharif season, the Modi govt has set an ambitious target to bring an additional 6.37 lakh hectare sowing area under oilseeds to make India self sufficient in edible cooking oil. Last year, oilseeds were sown in about 20.82 million hectare during the kharif and about 8 million hectares sown in the rabi (winter) season.
“Making India ‘AtmaNirbhar’ in edible oils is our cherished goal and national oilseeds mission is committed to achieve this by aligning policies & programme including foreign trade. The govt is concerned and monitoring the prices on a daily basis and expects the industry will pass on full benefits of this duty cut to the consumers,” the ministry added.
