Government cuts tariffs on edible oils to check prices during holiday season

New Delhi: In order to ensure the availability of edible oil to consumers at fair prices, the central government further reduced the standard tariff rate on crude palm oil, crude soybean oil and soybean oil. 2.5% crude sunflower and on refined palm oils, refined soybean oil and 32.5% refined sunflower oil from 11.09.2021.

Agri-cess for crude palm oil has been increased from 17.5% to 20%. The government, Vide Notification No. 43/2021-Customs, dated September 10, 2021 has rescinded the Government of India’s notification to the Department of Revenue No. 34/2021-Customs, dated September 29 June, 2021, except for things done or omitted to do before this cancellation, which means that the last import duty (wef 11.09.2021) is suspended until new orders.

It can be noted that the international prices and therefore the domestic prices of edible oils were high in 2021-22, which is a source of serious concern from the point of view of inflation and consumers. Import duties on edible oils are one of the important factors that have affected the landed cost of edible oils and hence domestic prices.

In order to mitigate the rise in these prices, the Indian government had taken a series of measures between February 2021 and August 2021. Some of them included-

1. Rationalization of import duties

The government, in Customs Notification 34/2021, dated June 29, 2021, reduced the standard rate of duty on crude palm oil to 10% from 06.30.2021 and will be in effect until September 30, 2021.

2. The government, in accordance with the notification n ° 10 / 2015-2020 of the DGFT of June 30, 2021, modified the policy of importing refined palm oils from “restricted” to “free” with immediate effect and for a period until 31.12.2021. .

In addition, refined palm oils are not permitted in any port in Kerala.

3. The government, in Customs Notification No. 40/2021 of August 19, 2021, reduced the standard duty rate on crude soybean oil and crude sunflower oil to 7.5% and oil refined soybean and 37.5% sunflower oil with effect from 20.08.2021. This was done through Amendments to Government of India Notification, Ministry of Finance (Department of Revenue) No. 34/2021-Cutoms, dated June 29, 2021.

4. Facilitation at various ports by customs, FSSAI, PP&Q, DFPD and DoCA

5. To expedite the clearance of imported edible oil shipments delayed due to COVID-19, a committee is in place, consisting of the Indian Food Safety and Standards Authority (FSSAI), Plant Quarantine of D / o Agriculture, Cooperation & Farmers Welfare, D / o Food and Public Distribution, D / o Consumer Affairs and Customs which examines consignments of imported edible oils on a weekly basis and also informs the Interministerial Committee for Agricultural Products chaired by the Secretary (Food).

The standard operating procedure for faster customs clearance of edible oil import consignments has been prepared. The average residence time for customs clearance of consignments has fallen to 3.4 days for edible oils.

According to the latest notification, the previous and current import duties are shown below:

The tariff reductions already made amount to approximately Rs. 3500 crore in a full year. With the current / most recent reduced import duty valued at Rs 1,100 crore in a full year, the total direct value of the benefits that should be passed on to consumers, in terms of rights waived by the government, is of 4,600 crore rupees.


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