At present, the applicable duty on crude edible oil imports is 5.5 per cent, which the government is considering further reducing.
The price of edible oil may come down in the coming days. The government is preparing to further reduce import duty on crude edible oil. According to two sources familiar with the matter, there are plans to reduce tariffs on crude edible oil. Besides, the government is also considering increasing the current deficit in import duty on edible oil after September 30.
The current tariff on crude edible oil imports is 5.5 per cent. The government has reduced it from 7.5 per cent to 5.5 per cent just a few months ago. The current tax structure does not include basic tariffs, which are currently zero on all crude edible oil imports. Instead, two benefits called Agricultural Infrastructure Development Cess (AIDC) and Social Welfare Cess have been introduced.
On 13 February, the central government reduced the Agricultural Infrastructure Development Cess (AIDC) from 8.5 per cent to 5 per cent. As a result, the tariff on edible oil imports has come down from 6.25 per cent to 5.5 per cent. This reduction in import duty is applicable till 30 September 2022.
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Officials at the Central Bureau of Indirect Taxes and Customs (CBITC) said the cess could be further reduced. He said the Russia-Ukraine war and other situations have disrupted global production and supply of edible oil, which has pushed up prices. To avoid the burden of rising prices, the government reduced tariffs in October 2021, effective September 2022.
The first reduction in tariffs on edible oil imports was made in June 2021. Then in August and September the main duty is reduced. At that time this discount was 30 September 2021. But retail prices of edible oils continue to decline.
In October 2021, all import duties on crude palm oil, soybean oil and sunflower oil were abolished till March 31, 2022. As a result of this measure, the import duty on crude palm oil has come down to zero from 24.75 percent. Explain that India buys 80 percent of its needs (9. 9.3 billion in FY 2022) only in crude form.
Government-imposed stock limits
The Center for Controlling the Prices of Edible Oil and Oilseeds has recently asked the states to implement stock limiting orders for these products. The Center has asked the states to maintain supply and execute the order without any hindrance to trade. On February 3, the Union Ministry of Consumer Affairs directed to increase the stock limit of edible oil and oilseeds for three months till June 30. The order also mentioned the limits of conservation.