Sticky edible oil prices prompt fresh import duty cuts

In a bid to curb the persistently high inflation in edible oils, the government has decided to exempt crude palm, soya-bean and sunflower seed oils from customs duty, and slash the Agriculture Infrastructure and Development Cess (AIDC) levied on their imports from October 14 till March 31, 2022.

The customs duty on edible grade palm, sunflower and soya-bean oils is being virtually halved as well, from 32.5% to 17.5% for the same period, with no cess levied on their imports.

A fresh intervention from the government was triggered by the high retail inflation in edible oils and fats of 34.2% for September, even as headline inflation cooled off to 4.2% and consumer food price inflation fell to just 0.68%. “The decision would help in reducing price burden on ultimate consumers amid the surging edible oil prices,” said Abhishek Jain, tax partner at EY.

Imports of crude palm, soya-bean and sunflower seed oils attract a basic customs duty of 2.5% and an AIDC of 20%. The customs duty has been dropped to zero till the end of March next year, while the cess has been reduced to 5% for crude soya-bean and sunflower seed oil. In the case of crude palm oil, the AIDC cess has been pegged at 7.5% instead of the original 20%.

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Printable version | Oct 16, 2021 2:38:45 AM |

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