The Hindu : Business : Customs duty cut on palm oils

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Saturday, Aug 12, 2006

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Customs duty cut on palm oils

Special Correspondent

`Prices likely to come down by about Rs. 2 a kg.'

NEW DELHI: As part of the moves to keep the prices of essential commodities under check, the Union Government on Friday reduced the customs duty on crude and refined palm oils and palmolein by ten percentage points. The duty cut, effective from Friday, is expected to cost the Central Exchequer Rs. 650 crore in a full year.

The customs notification said the duty on crude palm oil, crude palmolein and other varieties of crude palm oil has been reduced to 70 per cent from the present 80 per cent.

In the case of refined bleached deodorised palm oil, palmolein and other refined palm oils, the duty has been cut to 80 per cent from 90 per cent.

Recently, the Government had reduced the customs duty on wheat, besides exempting sugar and pulses imports from the duty.

Despite the duty cut on edible oils, the landed cost of these oils would be higher than what it was in the first week of February. The duty has been cut to serve as a cushion to the impact of the increase in global edible oil prices, a CBEC (Central Board of Excise and Customs) spokesperson explained.

PTI, UNI report:

The duty cut is likely to bring down prices by about Rs. 2 a kg, the spokesperson said.

Since the tariff value of these oil imports was expected to go up in the coming months, the reduction might more or less be revenue neutral.

The Government had increased the customs duty on palmoil imports from 65 per cent to 80 per cent in February 2005. This is the first revision since then.

India is also a major importer of soya oil but the Government has retained the customs duty at 45 per cent in a bid to protect the interest of Indian farmers. The WTO bound rate on soya oil is 45 per cent and the Government has, therefore, no scope for increasing it.

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