The cabinet committee on economic affairs (CCEA) is expected to consider a proposal on Thursday to hike import duty on refined edible oil to 10% for protecting domestic industry and farmers.
“The CCEA is scheduled to meet tomorrow and among other things it will consider the food ministry’s proposal of increasing import duty on refined edible oils,” said a source.Currently, the import duty on crude edible oil is 2.5%, while on refined edible oil is 7.5%. Since the duty difference is only 5% between the two varieties, traders have resorted to higher import of refined oils, thereby affecting the domestic refiners and farmers.
To keep domestic refiners from operating at under- capacity, the food ministry has proposed duty difference of 7.5% between the two varieties by raising import tax on refined edible oil to 10%, the source said.If approved, the move is expected to fetch Rs.600 crore revenue to the government, the source added.
Ministries of finance and commerce have endorsed the food ministry’s proposal. The agriculture ministry has however recommended flexible import duty structure, whereby they would automatically go up if global edible oil prices decline by a certain level and fall as soon as international prices rise.
The edible oil industry has demanded increasing import duty on refined edible oil to 30%. India produces 9 million tonne edible oil, while the consumption is around 20 million tonne. The rest is met through imports. In the 2012-13 fiscal, the country had imported Rs.61,273 crore worth of edible oils.
Source:- livemint.com
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