Palm, soybean oil import base price unchanged

The government has decided not to cut the base price on which import duty is levied on palm and soyabean oils, despite a decline in their international prices. In a notification issued Tuesday, it said the base prices for all grades of palm and soya oils have been left unchanged.

In India, government fixes the base price or "tariff value" on which import duty is levied for palm oils and crude soyabean oils. These prices are increased or decreased when there is at least a 10per cent change in global prices.

The base prices were last cut on September 15 after a significant decline in international prices. Since then, global prices have further declined by more than 10per cent and the industry had been expecting a proportional cut in the base prices.

However, in the fresh notification issued by the Central Board of Excise Customs, these base prices have been left unchanged.

Only in the case of brass scrap, the tariff value has been cut to $1,461 per tonne from $1,495 a tonne.

In the case of palm oils, the actual cost, insurance and freight price or landed cost at Indian ports is around $100 a tonne, lower than the base price on which the duty is levied.

As a result, the actual duty paid is 100-110per cent, against the fixed customs duty of 65 per cent and 75 per cent for crude and refined palm oils, respectively. This leads to keeping their prices artificially high by around four rupees per kilogram.

The concept of fixing base prices for levying import duty on edible oils was introduced in August 2001 to prevent underinvoicing by importers.