The central government took a big decision on Tuesday regarding the prices of edible oil. The government has announced the abolition of custom duty and Agriculture Infrastructure and Development Cess for two years on the import of 20 lakh metric tonnes of soybean oil and sunflower oil. This cess is currently 5 percent.
The decision is expected to make cooking oil cheaper. The exemption given on the import of oils will be applicable till March 31, 2024. Edible oil is the major contributor to inflation and the retail price of edible oil has registered a rise of more than 15 per cent for the last three months.
According to the notification issued by the Finance Ministry on Tuesday, import tax will not be levied on 2 million tonnes of crude soybean and sunflower oil annually in the financial years 2022-23 and 2023-24.
Central Govt. has allowed import of a quantity of 20 Lakh MT each of Crude Soyabean Oil & Crude Sunflower Oil per year for a period of 2 years at Nil rate of customs duty & Agricultural Infrastructure and Development Cess.
This will provided significant relief to the consumers. pic.twitter.com/jvVq0UTfvv
— CBIC (@cbic_india) May 24, 2022
The Central Board of Indirect Taxes and Customs (CBIC) wrote in a tweet, “Central Govt. has allowed import of a quantity of 20 Lakh MT each of Crude Soyabean Oil & Crude Sunflower Oil per year for a period of 2 years at Nil rate of customs duty & Agricultural Infrastructure and Development Cess. This decision will provide significant relief to the consumers.”
The government has taken this step to reduce the rising edible oil prices in the local market. The government uses the cess to raise money for infrastructure projects related to agriculture. The government has limited options like removing the tax on imports and abolishing the cess to bring down oil prices.
India has already abolished base import tax on most edible oils, including palm oil and soybean oil. Along with this, an inventory limit has also been imposed to prevent hoarding. Oil prices have risen in the international market since Russia’s attack on Ukraine.
The supply of sunflower oil from the Black Sea region has stopped due to the attack. India currently imports 60% of its edible oil requirement. The biggest challenge before the central government is to contain the rising inflation. In April, wholesale inflation in the country reached the highest level in three decades.