In view of the unabated hike in edible oil prices, the Centre has scrapped basic customs duty on crude varieties of palm, sunflower and soyabean oils.
The government has also decided to cut duties on refined edible oils to ease retail prices of cooking oils and provide relief to consumers during the festive season.
Edible oil industry body SEA said the retail prices of cooking oils, which are ruling at a very high level, could now come down by up to Rs 15 per litre.
The cut in import duty and cess, effective from October 14, will remain in force till March 31, 2022, the Central Board of Indirect Taxes and Customs (CBIC) said in two separate notifications.
Agri infrastructure development cess (AIDC) has also been reduced on crude palm oil, crude soyabean oil and crude sunflower oil.
Crude palm oil will now attract AIDC of 7.5 per cent, while the cess will be 5 per cent each for crude soyabean oil and crude sunflower oil.
Earlier, the cess was 20 per cent, while basic customs duty was 2.5 per cent.
Post reduction, the effective customs duty on crude palm oil will be 8.25 per cent.
The effective duty on crude soyabean oil and crude sunflower oil will be 5.5 per cent.
Earlier, the effective duty on these three crude items was 24.75 per cent each.
The basic customs duty on refined varieties of sunflower, soyabean, palmolein and palm oil too has been slashed to 17.5 per cent each from 32.5 per cent. Refined versions do not attract AIDC.
Commenting on the development, Solvent Extractors” Association of India (SEA) Executive Director B V Mehta said: “The government has slashed import duties on edible oils because of high retail prices in the domestic market and the festive season.”
However, he said the timing of the decision is not correct as it may impact farmers” income.
“Harvesting of soyabean and groundnuts has started. The decision to reduce import duties may bring down market prices and lower price realisation by farmers,” Mehta said.