Centre reduces standard rate of duty on Crude Palm, Soyabean & Sunflower oils
To ensure that edible oil is available to consumers at reasonable prices, the Government of India, vide Notification No. 42/2021-Customs dated September 10, 2021, further reduced the standard rate of duty on crude palm oil, crude soyabean oil, and crude sunflower oil to 2.5% with effect from September 11, 2021, and (ii) the standard rate of duty on refined palm oils, refined soyabean oil, and refined sunflower oil to 2.5% with effect from September 11, 2021.
The agricultural process for crude palm oil was increased from 17.5% to 20% in the same notification.
Government, in accordance with Notification No. 43/2021-Customs, dated September 10, 2021, revoked the Government of India's notification in the Ministry of Finance (Department of Revenue), No. 34/2021-Customs, dated June 29, 2021, except for actions taken or omitted to be taken prior to such rescission, implying that the latest import duty will remain in effect until further orders.
It should be highlighted that international prices of edible oils, and thus domestic prices, have been trending upward during 2021-22, which is cause for considerable concern from both an inflation and consumer perspective. Import tariff on edible oils is a significant element affecting the landed cost of edible oils and, consequently, domestic prices.
Between February and August 2021, the Government of India took a series of actions to minimise the increase in these prices. Among them were the following:
1. Import Duty Rationalization
The Government, through Notification No. 34/2021-Customs dated June 29, 2021, cut the standard rate of duty on Crude Palm oil to 10% effective June 30, 2021, and lasting until September 30, 2021.
2. The Government, by DGFT Notification No. 10/2015-2020 dated June 30, 2021, has changed the import policy for refined palm oils from "restricted" to "free" with immediate effect and through December 31, 2021.
Additionally, refined palm oils are not permitted to be transported through any port in Kerala.
3. The Government, through Notification No. 40/2021-Customs dated August 19, 2021, reduced the standard rate of duty on crude soybean and crude sunflower oil to 7.5 percent and on refined soybean and sunflower oil to 37.5 percent, effective August 20, 2021. This was accomplished through modifications to the Government of India's notification No. 34/2021-Cutoms, issued June 29, 2021, under the Ministry of Finance (Department of Revenue).
4. Facilitation by Customs, FSSAI, PP&Q, DFPD, and DoCA at various ports.
5. To expedite the clearance of consignments of imported food oils that have been delayed as a result of Covid-19. The Food Safety and Standards Authority of India (FSSAI), the Department of Agriculture, Cooperation and Farmers Welfare's Plant Quarantine, the Department of Food and Public Distribution, the Department of Consumer Affairs, and Customs have formed a committee that reviews consignments of imported edible oils on a weekly basis and also informs the Inter-Ministerial Committee on Agricultural Commodities, chaired by Secretary (Food).
A Standard Operating Procedure has been developed to expedite the clearance of consignments of edible oil imports. The average dwell time for consignments cleared has decreased to 3.4 days in the case of edible oils.