BCD on crude sunflower oil cut to nil; soybean and palm oil duty reduced to 5%
New duty structure maintains 19.25% differential between crude and refined edible oils to support domestic refining
New Delhi, September 24: The Government of India has reduced the Basic Customs Duty (BCD) on major imported crude edible oils to moderate domestic edible oil prices, provide relief to consumers and mitigate inflationary pressures arising from higher international edible oil prices.
Under the revised duty structure, the BCD on crude sunflower oil has been reduced from 10% to nil, while the duty on crude soybean oil and crude palm oil has been reduced from 10% to 5%.
The government has also reduced the applicable BCD on the respective refined edible oils while maintaining a 19.25% import duty differential between crude and refined edible oils.
Move aimed at lowering landed costs
According to the government, the duty rationalisation takes into account the increase in international edible oil prices and the resulting rise in domestic landed costs and retail prices.
Import duties form an important component of the landed cost of imported edible oils and influence domestic market prices.
The reduction in duty on crude edible oils is expected to lower their landed cost and facilitate transmission of the benefit through the domestic supply chain, with the government saying the measure is aimed at providing consumer relief and containing food-price and overall inflationary pressures.
Domestic refining capacity protected
The government has retained the duty differential between crude and refined edible oils to encourage the utilisation of domestic refining capacity and discourage excessive imports of refined edible oils.
The measure is expected to provide a more level playing field for domestic refiners while supporting value addition within the country.
Industry asked to pass on benefit
The government has also issued an advisory to edible oil associations and industry stakeholders to ensure that the full benefit of the import duty reduction is passed on to consumers.
Industry stakeholders have been requested to immediately revise their Price to Distributors (PTD) and Maximum Retail Price (MRP) in line with the reduction in landed costs.
Edible oil associations have also been asked to advise their members to implement the corresponding price reductions without delay.
The government said it would continue to monitor developments in international edible oil markets and domestic prices and take appropriate measures, as necessary, to safeguard consumer interests while maintaining a balanced policy environment for farmers and the domestic edible oil industry.
