In a bid to boost domestic supply and reduce prices, the government has reduced the basic customs duty on crude, soyoil, and sunflower oil to 7.5 per cent – almost half of its previous rate. The Central Board of Indirect Taxes and Customs (CBIC) said in a notification that the basic import duty on refined soyoil as well as sunflower oil is lowered to 37.5 per cent – from 45 per cent, with effect from August 20.
The reduction in the customs duty will be applicable till September 30, according to CBIC. The lower duties are intended to boost the domestic supply in the economy and also ease the rising prices of vegetable oil in the domestic market.
Over and above the basic customs duty, crude soyoil and sunflower oil attract a 20 per cent agriculture infrastructure and development cess, as well as a 10 per cent social welfare cess. However, the refined versions of the soyoil and sunflower oil attract only the social welfare cess.
After crude oil and gold, edible oil is India’s third-largest imported commodity. By the end of June 2021, the government slashed import duty on crude palm oil, refined, bleached and deodorised palm oil, palm stearin, palmolein, and other palm oils till September 2021.
The import duty on crude palm oil was reduced to 10 per cent, while that on refined, bleached and deodorised palm oil, palmolein, palm stearin and other palm oils to 37.5 per cent.
Meanwhile, on Wednesday, the government approved the ‘National Mission on Edible Oils- Oil Palm’ scheme to reduce its import dependence on edible oils, especially palm oil to boost domestic production. The scheme will have a financial outlay of Rs 11,040 crore and seeks to improve the domestic cultivation of palm oil in the next five years.