Taxes, competition hit UP mustard oil mills

The entry of multinational companies in the refined vegetable oil market, the mustard oil mill owners in Uttar Pradesh have been seriously hit, both by the imported oil and the high-tax rates on mustard oil in the state, resulting in a steep hike in mustard oil prices over the past couple of years. UP is one of the largest producers of mustard oil in the country.

Being one of the most important sources of edible oil and cattle feed in India, mustard oil is undoubtedly in the focus of the Indian edible oil industry and being extremely low on saturated fats, it also has export possibilities.

Facing a crisis in marketing their products due to high prices, the All India Mustard Oil Producers Association (MOPA) and UP Oil Millers Association have asked the UP government to reduce the trade tax burden on mustard oil producing units in the state.

Raising this demand before the UP PWD Minister Shivpal Singh Yadav in a meeting of prominent oil mill owners of the country, Shivkumar Rathore, president, UP Oil Millers Association and managing director, Mahesh Edible Oil Industries Ltd, Agra, said the mustard oil industry in the state was facing a stiff competition from multinational oil companies.

He said the 4 per cent trade tax on oil and a similar tax amount on oilseeds, apart from excise and other related taxes, had seriously hit the mill owners as well as the consumers who were being forced to pay high prices for the oil.

He demanded that the taxes on oil and oil products be reduced to a more logical level to enable the edible oil industry to survive.

Addressing this demand, the minister said the state government was aware of the problems being faced by the oil traders in UP and as a remedy to these troubles, the government shall be bringing the "Samadhaan" scheme in effect soon, so that the oil traders get a rebate on the variety of taxes applicable on the oil business.

In this scheme, he said, the oil producing units would be liable to pay a fixed amount of tax based on the monthly production capacity of the unit.

Also, he said, the state government would provide assistance to the oil units of UP in establishing their brand identity if they managed to maintain high standards of production.