In order to arrest price rise in edible oils, the Government has slashed import duty on palm, sunflower and soyabean oil to bring relief to the common man reeling under skyrocketing cooking oils prices. The decision comes after edible oil prices have seen a spike up to 50 per cent in the last one year. The reduction in taxes could bring down prices of the edible oils in India and boost consumption, effectively increasing overseas buying by the south Asian country. In the last few months, the Centre has cut import duty on various edible oils and asked states to take details of stock of edible oils and oilseeds from wholesalers, millers, refiners and stockists.
"With effect from Saturday, the base import tax on crude palm oil has been slashed to 2.5 percent from 10 percent, while the tax on crude soyoil and crude sunflower oil has been reduced to 2.5 percent from 7.5 percent," the Ministry of Finance said in a notification.
The import duty along with cesses on crude palm oil (CPO) will be 24.75 per cent against 30.25 per cent. On RBD (refined, bleached, and deodorized) palm oil, it will come down to 35.75 per cent from 41.25 per cent. For crude degummed soybean oil, the new rate will be 24.75 per cent against 30.25 per cent and on refined soybean oil, the rate has been lowered to 35.75 per cent from 41.25 per cent. Duty has also been lowered in crude sunflower oil to 24.75 per cent from 30.25 per cent. After the cuts, crude palm oil, soyoil and sunflower oil imports will be subject to a 24.75 percent tax in total, including a 2.5 percent base import duty and other taxes, while refined grades of palm oil, soyoil and sunflower oil would carry a 35.75 percent tax in total.
Earlier, the government has also reduced import duty on edible oils last month. In a major step last month, the government has reduced the price of cooking oil. The Centre has made 7.5 per cent reduction in the import duty of soya oil and sunflower oil in August. While the move was meant to cool down domestic prices of edible oils, it failed to do so as international prices in Indonesia and Malaysia rose quickly to near record highs anticipating a renewed demand from Indian buyers.
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.
The Kharif soyabean crop of the 2021-22 crop year (July-June) is expected to be 5-10 per cent higher than the same period a year ago.