In a move to ease out retail prices of edible oil in India this festive season, the central government has cut down the base custom duties on edible oils- palm oil, soybean oil and sunflower oil. The finance ministry issued a notification stating that the base import duty on crude palm oil has declined from 10% to 2.5%. While on soy oil the tax has declined from 7.5% to 2.5%. The notification has come into effect from September 12.
The government slashing the import duties on edible oil could bring down the retail prices by Rs 4-5 per litre, Solvent Extractors’ Association of India (SEA) executive director B V Mehta told a news agency. The impact of this will be observed in the international market, thereby bringing down the prices by only Rs 2-3/litre in India. He also pointed at the fact that the centre should have also cut down prices on mustard oil for the benefit of a larger population.
In July, the retail inflation for edible oil and fats was 32.53% as compared to 6.65% in January 2021. Over 65% of India’s domestic demand for edible oil is met through imports and thus it is the largest importer of vegetable oils in the world. India imports palm oil mainly from Indonesia and Malaysia. The countries like Argentina, Brazil, Ukraine and Russia supply soya oil and sunflower oil to India.
The Centre has reduced import duty on various edible oils in the past few months. Earlier it had sought the states to take details of stock of edible oils and oilseeds from wholesalers, millers, refiners and stockists. Over Rs 11,040 crore-palm oil mission was also announced.
In August, the Central Board of Indirect Taxes (CBIC) in order to increase supply had reduced the basic customs duty on crude soyoil to half and sunflower oil to 7.5%. After crude oil and gold, edible oil is India’s third-largest imported commodity.
On the other hand, petrol prices have been hiked 40-41 times in the current fiscal year. Petrol prices have already crossed the Rs 100-mark in major cities and more than 20 states and union territories – Rajasthan, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, Karnataka, Jammu & Kashmir, Odisha, Manipur, Ladakh, Bihar, Punjab and others. Only the state government of Tamil Nadu had announced a reduction in the petrol cess by Rs 3 during the state-level budget session to bring down the skyrocketing prices.
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