The food ministry announced on Sunday that until March 2023, certain edible oils are subject to preferential import taxes. In order to increase domestic supply and manage retail prices, the Central Board of Indirect Taxes and Customs (CBIC) made this decision on August 31, 2022. The CBIC’s decision to extend the current reduced import taxes on some edible oils is in effect through March 2023, according to the most recent announcement from the food ministry.
The statement read, “The deadline for the concessional customs duty on edible oil import has been extended by another 6 months, making the new date March 2023.” The government added that a decline in international prices has been driving down domestic edible oil prices. Retail prices of edible oils have significantly decreased in India due to lowering global rates and cheaper import tariffs. The statement claims that until March 31, 2023, the current tariff structure for crude palm oil, RBD palmolein, crude soybean oil, refined soybean oil, crude sunflower oil, and refined sunflower oil will stay in place.
Currently, there is no import tax on crude forms of palm, soy, and sunflower oils. The effective tariff on the crude kinds of these three edible oils is 5.5% after accounting for the 5% agri cess and the 10% social welfare cess. On refined palm oil and refined palm varieties, the baseline customs duty is 12.5%; the social welfare cess is 10%. The actual duty is therefore 13.75%. The baseline customs charge for refined soyabean and sunflower oil is 17.5%, and after adding the 10% social welfare cess, the actual duty is 19.25%.
Due to the high price of edible oils throughout the previous year, the government frequently reduced import taxes on palm oil to stimulate domestic supply. Retail prices have been under pressure in recent months, following cues from the global market, as India imports more than 60% of its edible oil needs. In the October 2020-21 oil marketing year, India imported a record amount of edible oil, totaling Rs.1.17 trillion.