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Modi govt cuts duty on edible oils – Sunflower, Soyabean and Palm oil would be cheaper

New Delhi – In order to ensure availability of edible oil to consumers at fair prices, Government of India, vide Notification No. 42/2021- Customs, dated 10th September 2021, has further reduced the standard rate of duty on edible oils namely Crude Palm Oil, Crude Soyabean oil and Crude Sunflower Oil to 2.5 percent, the standard, rate of duty on Refined Palm Oils and refined Soyabean oil and Refined Sunflower Oil to 32.5 percent.

In the same notification the Agri-cess for Crude Palm Oil has been increased from 17.5 percent to 20 percent.

The Government, Vide Notification No. 43/2021-Customs, dated 10th September 2021 has rescinded the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 34/2021- Customs, dated the 29th of June, 2021, except as respects things done or omitted to be done before such rescission meaning thereby the latest import duty on edible oils, w.e.f. 11.09.2021, stand still till further orders.

It may be noted that the International prices and thereby domestic prices of edible oils have been ruling high during 2021-22 which is a cause of serious concern from inflation as well as consumer’s point of view. Import duty on edible oils is one of the important factors that impacted landed cost of edible oils and thereby domestic prices.

In order to mitigate the rise in these edible oils prices, Government of India had taken series of steps between February 2021 and August 2021.

Rationalization of Import Duty

The Government, Vide Notification No. 34/2021- Customs, dated 29th June, 2021, has reduced the standard rate of duty on Crude Palm Oil to 10 percent from 30.06.2021 and will have effect up to 30th September, 2021.

The Government, vide DGFT’s Notification No. 10/2015-2020 dated 30th June, 2021, has amended the import policy of Refined Palm Oils from “restricted” to “free” with immediate effect and for a period of up to 31.12.2021.

Further, the refined Palm Oils is not permitted through any port in Kerala.

The Government, Vide Notification No. 40/2021- Customs, 19th August, 2021, has reduced the standard rate of Duty on Crude Soyabean Oil and Crude Sunflower Oil to 7.5 percent and Refined Soyabean Oil and Sunflower oil to 37.5% with effect from 20.08.2021. It has been done through the amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No. 34/2021-Cutoms, dated 29th June, 2021

Facilitation of edible oils consignment at various ports by Customs, FSSAI, PP&Q, DFPD and DoCA

To speed up clearances of consignments of imported edible oils delayed due to COVID-19, a Committee is in place comprising of Food Safety and Standards Authority of India (FSSAI), Plant Quarantine of the Agriculture, Cooperation and Farmers Welfare, Food and Public Distribution, Consumer Affairs departments and Customs which reviews the consignments of imported edible oils on weekly basis and also apprises the Inter-Ministerial Committee on Agricultural Commodities chaired by Secretary (Food).

The Standard Operating Procedure for faster clearance of consignments of imports of edible oils has been prepared. The average dwell time for clearances of consignments has come down to 3.4 days in case of edible oils.

The duty cuts already made amount to an estimated Rs 3500 crore in a full year. With the current and latest reduced import duty worth Rs.1100 crore in  full year, total direct value of benefits expected to be passed on to the consumers, in terms of duties given up by Government, is Rs 4600 crore.

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