NEW DELHI, June 26: The Food Ministry has moved the proposal before the CCEA to consider defreezing of the import tariff value of refined cooking oil RBD palmolein to increase competitiveness of domestic edible oil refineries.
The tariff value is the base price on which the customs duty is determined. Since July 2006, the government has kept import tariff value on RBD palmolein oil unchanged at USD 484 per tonnes keeping in view of inflation at that time. At present, import duty on refined edible oils is 7.5 per cent.
“A proposal has been moved before the Cabinet Committee on Economic Affairs (CCEA) to consider revision of import tariff value of RBD palmolein,” an highly placed source said.
The Food Ministry has suggested defreezing of import tariff value of RBD palmolein and linking it with the current global price, the source said, adding that the issue may come up for discussion in the forthcoming CCEA meeting.
Currently, the government is not only losing revenue but also facing underutilisation of domestic edible oil refineries as lower tariff value on imported refined palmolein has boosted shipments in the last few years.
Despite the customs duty of 7.5 per cent on RBD palmolein, the revenue collection has been less as the government is imposing duty on it at a base price of USD 484 a tonne instead the current global price of USD 1,000 a tonne.
Also, the increase in cheaper RBD palmolein has started affecting competitiveness of the domestic refined oil industry. Local refineries, which have the annual capacity of 12 million tonnes, have remained underutilised in the country.
The industry experts said the surge in import of refined palm oil has also been due to lowering of export duty on the commodity by the Indonesian government.
A source in the Food Ministry said, “Our refining capacity can be fully utilised if we import palm oil in crude form instead of refined oil. Defreezing of tariff value on imported RBD palmolein will help to protect our industry.”
India’s import of refined palmolein has risen to 10.85 lakh tonnes during November-May period of the 2011-12 oil year (November-October), as against 5.51 lakh tonnes in the year-ago period, the official data said.
At present, crude and refined palm oil constitute 77 per cent of the country’s total vegetable oil import of 8.37 million tonnes in 2010-11. (PTI)
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