Edible-Oil-price-16500780153x2Mumbai: Edible oil may become cheaper in the coming days. The government is preparing to reduce the import duty on crude edible oil. Sources familiar with the incident said the two cess levied on crude edible oil may be reduced. The government is also planning to continue the cut in import duty on edible oil till September 30.

Currently, there is an import duty of 5.5 per cent on crude edible oil. The government had reduced the duty to 5.5 per cent from 8.5 per cent a few months back. The current tax system excludes basic customs duty, which is currently zero on all crude edible oil imports. Instead two cesses have been levied. These include Agriculture Infrastructure Development Cess (AIDC) and Social Welfare Cess.

Government reduced cess

On February 13, the government reduced the Agriculture Infrastructure Development Cess from 7.5 per cent to five per cent. Consequently, the import duty on edible oil was reduced from 8.5 per cent to 5.5 per cent. This relief in import duty is applicable till 30 September 2022.

it raises prices

Officials of the Central Bureau of Indirect Taxes and Customs (CBITC) said the cess could be further reduced. He said the Russo-Ukraine war and other situations have affected global edible oil production and supply, pushing up prices. The government has reduced the duty applicable from October, 2021, which is applicable till September, 2022, so that the additional burden of price is not passed on to the consumers.

The import duty on edible oil was first reduced during June 2021. Basic customs duties were later reduced in August and September. At that time this deduction was applicable till 30 September 2021. However, the retail price of edible oil remained high, which brought down it.

During October 2021, all import duties on palm oil, soybean oil and sunflower oil were abolished till March 31, 2022. Later, the import duty on crude palm oil was reduced from 24.75 per cent to zero. India buys 80% of its palm oil in crude form.

government-imposed stock limit

The central government has recently directed the states to impose stock limits on these items to control the prices of edible oils and oilseeds. The central government has asked the state governments to maintain the supply and implement the order without any hindrance. The Union Ministry of Consumer Affairs has directed to implement the stock limit rule by June 30. The stock limit is also mentioned in the order.

Source