Import Duty on Crude Palm Oil Slashed to 10 percent, RBD Palm Oil Now 37.5 percent

· Concession only for Three Months to 30 Sept

The government on Tuesday reduced basic customs duty on crude palm oil to 10 per cent, which will help bring down the edible oil prices in the retail market.

The Central Board of Indirect Taxes and Customs (CBIC) in a notification cut the basic customs duty on crude palm oil to 10 per cent and refined palm oil to 37.5 per cent with effect from Wednesday.

The effective duty, which includes cess and other charges, on crude palm oil will be 30.25 per cent, while for refined palm oil it would be 41.25 per cent from Wednesday.

“This notification shall come into effect on 30th June 2021 and will remain in force up to and inclusive of the 30th September 2021," the CBIC said.

Currently, basic customs duty on crude palm oil is 15 per cent, while it is 45 per cent for all other categories of palmolein (RBD Palm Oil, RBD Palmolein, RBD Palm Stearin and any Palm Oil other than Crude Palm Oil).

“To give relief to people, the Government has reduced customs duty on crude palm oil from 35.75 per cent to 30.25 per cent and refined palm oil from 49.5 per cent to 41.25 per cent. This will bring down the retail prices of edible oils in the market,” the CBIC tweeted.

Solvent Extractors Association of India (SEA) Executive Director BV Mehta said, "The government has tried to balance the interest of both consumers and farmers. It will give immediate relief to the poor, while farmers will be protected as duty will be again increased from October when the harvesting season begins”.

The reduction in import duty of refined palm oil will not have much impact, as the inward shipments are restricted, he added.

Domestic edible oil prices have more than doubled in the past year. India meets about two-thirds of its edible oil demand through imports.

As per data by industry body SEA, India's import of palm oils rose by 48 per cent to 7,69,602 tonne in May 2021 on higher shipments of crude palm oil.

India, the world's leading vegetable oil buyer, had imported 4,00,506 tonne palm oils in May 2020.

The country's total vegetable oil imports rose by 68 per cent to Rs 12.49 lakh tonne in May 2021, compared to 7.43 lakh tonne in the year-ago period.

The share of palm oil is more than 60 per cent of the country's total vegetable oil imports.

Earlier this month, the government had reduced the tariff value for the import of edible oil, including palm oil, by up to USD 112 per tonne, a move which experts had said would help lower domestic prices.

Tax experts had said that the reduction in tariff value could result in softening of edible oil prices in the domestic markets as customs duty payable on-base import price would also come down.

[Notification No. 34/2021-Customs dated 29 June 2021]

Seeks to reduce the basic custom duty on Crude Palm Oil [1511 10] and Palm Oil other than Crude Palm Oil [1511 90] till 30th September 2021.

G.S.R. (E)…- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of the description specified in column (3) of the Table below, falling within the Chapter, heading, sub–heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) specified in column (2) of the said Table, when imported into India, from so much of the duty of customs leviable thereon under the said First Schedule, as is in excess of the amount calculated at the standard rate specified in the corresponding entry in column (4) of the said Table, namely -

Table
S. No.	Chapter, heading, sub- heading or tariff item	Description	Standard Rate
(1)	(2)	(3)	(4)
1.	1511 10 00	Crude Palm Oil	10%
2.	1511 90	All goods (RBD Palm Oil, RBD Palmolein, RBD Palm Stearin and any Palm Oil other than Crude Palm Oil)	37.5%

2. This notification shall come into effect on 30^th June 2021 and will remain in force upto and inclusive of the 30^th September, 2021.

[F. No. CBIC-190354/87/2021-TRU Section-CBEC]