Hike in Customs Duty on Vegetable Oils
GOVERNMENT has increased the Customs duty on crude and refined vegetable oils by 5 percentage points. There was a similar hike in December 2014 which we reported in - 26.12.2014. The situation is almost same, though this time around the industry is not at all happy with the small hike.
The Industry has been demanding a hike to 25% to 45% whereas the hike now is to 12.5% and 20%. It seems the market price of the oils will go up by just 70 to 80 paise per kg. It is reported that India imports 60% of its edible oils consumption.
The Taipei Times reported the hike prominently commenting:
While higher taxes might fuel costs for Indian consumers, they might also hamper efforts by top palm oil producers Indonesia and Malaysia to drain near-record inventories and shore up prices.
Palm oil, used in everything from chocolates to cosmetics, is in a bear market and soybean oil is trading near a nine-year low as China's economic slowdown and a rout in crude prices hurts demand and worsens a global glut of cooking oils.
India meets more than half its cooking oil requirements through imports with palm oil shipped from Indonesia and Malaysia and soybean oil from the US, Brazil and Argentina.
The paper quoted Oil World that India's oilseed crop might fail for a second year, prompting the world's biggest palm oil buyer to keep imports near a record this year and next year.
The existing and amended rates are:
S. No. | Chapter or Heading or sub-heading or tariff item | Description of goods | Rate of duty | |
|---|---|---|---|---|
EXISTING | AMENDED | |||
(1) | (2) | (3) | (4) | (5) |
51 | 15 | Crude Palm Oil - 1511 | 7.5 | 12.5 |
55 | 15071000 | All goods (Soya) | 7.5 | 12.5 |
56 | 15079010 | All goods (Soya) | 15 | 20 |
57 | 1508, 1509, 1510, 1512, 1513, 1514, or 1515 | All goods, crude and edible grade (Ground nut) | 7.5 | 12.5 |
58 | 1508,1509, 1510, 1512, 1513, 1514 or 1515 | All goods, refined and edible grade | 15 | 20 |
59 | 1511 90 | All goods (Palm) | 15 | 20 |
62 | 15121110 | All goods (sunflower) | 7.5 | 12.5 |
63 | 15121910 | All goods(sunflower) | 15 | 20 |
65 | 1514 11 or 1514 91 | All goods, edible grade (rape, colza or mustard) | 7.5 | 12.5 |
66 | 1514 19 or 15 14 99 | All goods, edible grade (rape, colza or mustard) | 15 | 20 |
69 | 1516 20 | All goods, edible grade (animal or Vegetable fats) | 15 | 20 |
71 | 1517 10 21, 1517 90 10, 1517 90 20, 1518 00 11, 1518 00 21 or 1518 00 31 | All goods, edible grade (margarine) | 15 | 20 |
Notification No. , Dated: September 17, 2015