BCD on Edible Grade Soya-bean Oil and Sunflower Oil Slashed by 5%

· Now Rate Falls to 12.5% from 17.5%

· Govt says fall in edible oil price and duty not reflected in consumer prices

The government has lowered import duty on refined soyoil and refined sunflower oil to 12.5% from 17.5%, which will come into effect from 15 June, 2023, according to a government notification.

With this, now all crude oils I.e., crude palm oil, sunflower oil and soya oil will attract 5% import duty meaning a total tax incidence of 5.5%. In case of refined edible oil, effective import duty is 13.75%, made up of 12.5% import duty plus 10% cess on import duty.

During November to April, imports of palm products sharply increased due to price parity and reported at 4.9 million tonnes (MT) compared to 3.2 MT in the corresponding period last year. The share of palm oil increased to 61% from 49% while soft oils import reduced. However, in the last two months, shipments of sunflower and soybean oils sharply increased and reported in the first half of the current oil year (November-October) at 3.1 MT as against 3.3 MT last year. The share of soft oils dropped to 39% from 51%, according to SEA.

As per the latest data by SEA, India’s April import of vegetable oils (edible and non-edible) was down 10% on month, while palm Oil import fell 31% to 505,000 tonnes. However, soybean oil import was up 1% to 262,000 tonnes and Sunflower oil import went up 68% to 249,000 tonnes because of over supply at the lowest international price compared to soybean oil and crude palm oil.

The landed price of crude palm oil (CPO) at Mumbai port is quoted at $860 a tonne as on 2 June against $1,557 last year during the same time; crude soyoil at $970 compared to $1,686 and sunflower oil at $860 as against $1,941 per tonne. On the other hand, prices of refined soyoil are at ₹90,000 per tonne and sunflower oil at ₹92,000 a tonne. During the corresponding period last year, refined soyoil prices were at ₹1.4 lakh and sunflower oil at ₹1.7 lakh per tonne, as per the SEA data.

The government cut import duties on crude palm, soybean and sunflower oils in September last year and in December, it extended the concessional duties on edible oils till 31 March 31 next year.

India is the world’s largest buyer of vegetable oils and relies heavily on imports for about 60% of its annual consumption of 24 MT. Out of the total imports of 14 MT India’s edible oil annually, the share of crude and refined oil is 75% and 25% respectively.

[Notification No. 39/2023-Customs dated 14 June 2023]

Seeks to further amend 48/2021-Customs dated 14.06.2023 to reduce BCD on Refined Soya Bean Oil and Refined Sunflower oil to 12.5%

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 makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 48/2021-Customs, dated the 13th October, 2021, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 733(E), dated the 13th October, 2021, namely:-

In the said notification, in the Table,

i. against S. No. 2, in column (4), for the entry, the entry “12.5%” shall be substituted;

ii. against S. No. 6, in column (4), for the entry, the entry “12.5%” shall be substituted.

2. This notification shall come into force with effect from the 15th day of June, 2023.

[F. No. CBIC-190354/227/2022-TO(TRU-I)]