Soyabean Processors Association lobbies with government to increase import duty on edible oil

21 Oct 2022 , 08:24 AM

The oilseeds sector petitioned the government to raise import taxes on all types of oils after Diwali.

It expressed concern that lower import taxes on oils will encourage traders to import more, reducing reliance on domestic oilseed output, and that farmers may experience difficulties as the price of oilseeds may decline when the crop’s arrival ramps up after Diwali.

“We have requested in writing to Piyush Goyal, the Union’s minister of commerce, that the current tariff structure is reversed and increased. Oilseed producers will suffer if this doesn’t happen, according to DN Pathak, executive director of the Soybean Processors Association, told ET.

“This kharif’s oilseed crop has been good, however certain crops have high moisture content because of unseasonal rains. This crop won’t bring in much money.

At Rs5,000 per quintal, soybean prices are currently 14% higher than the MSP of Rs4,300 per quintal.

The government’s initial crop prediction for kharif 2022 places the production of oilseeds at 23.57 million tonnes. Production of this was 12.89 million tonnes of soybeans.

To contain the price increase, the government cut the import duty on edible oils.

The food ministry had announced at the end of August that some edible oils would be subject to concessional import taxes through March 2023 in an effort to increase domestic supply and stabilise retail prices.

Currently, there is no import tax on crude forms of soybean, palm, or sunflower oils. However, the final effective duty on the crude varieties of these three edible oils is 5.5% after accounting for the 5% agri cess and 10% social welfare cess.

On refined palm oil and refined palm varieties, the baseline customs duty is 12.5%; the social welfare cess is 10%. Therefore, the actual duty is 13.75%.

The baseline customs charge for refined soybean and sunflower oil is 17.5%, and when you add the 10% social welfare cess, the actual duty is 19.25%.

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