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Vanaspati units seek duty rationalisation

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Our Agriculture Editor New Delhi
Last Updated : Feb 06 2013 | 6:19 PM IST
The vanaspati industry has petitioned the finance ministry to correct the anomalies in customs and excise duties levied on the sector.
 
The import duty on crude palm oil, the main raw material for the production of vanaspati, or hydrogenated oil, was 65 per cent, while duty on the finished product, vanaspati, was 30 per cent.
 
This made import of hydrogenated oil or vanaspati cheaper rather than import of crude palm oil for processing, the Indian Vanaspati Producers' Association (IVPA) stated in a memorandum submitted to the finance ministry.
 
IVPA would like this to be rectified in the regular budget for the current fiscal to be presented by the new government after the polls. The import duty on vanaspati should be hiked to 70 or 75 per cent to discourage imports, IVPA suggested.
 
The 65 per cent import duty on crude palm oil was high and pushed up the cost of vanaspati by around Rs 16,000 a tonne.
 
This gave vanaspati producers in neighbouring countries like Nepal an advantage, as import duty on crude palm oil for vanaspati production was zero in those countries.
 
Producers there could dump their produce in India under the specially low tariff fixed for vanaspati imports from SAARC countries under the bilateral preferential trade pacts.
 
This was hurting domestic producers. The import duty on vanaspati from Sri Lanka was just 3 per cent and from Bangladesh only 15 per cent. Vanaspati from these countries were between Rs 11,500-15,500 cheaper per tonne.
 
IVPA would like vanaspati from these countries to be put on the negative list for imports.
 
The stipulation of a carotenoid (beta carotene) content of between 500 and 2500 parts per mg for an oil to qualify as crude palm oil was also creating problems, alleged IVPA.
 
Beta carotene content varied in the storage and transit periods and made compliance difficult. Industry had to pay higher import duty as a result.
 
IVPA would like free fatty acid content of the crude palm oil to be fixed at a minimum 2 per cent to remedy this.
 
IVPA said the high excise duty of Rs 1250 a tonne on vanaspati was a burden on consumers. Excise exemption granted to several by-products of vanaspati manufacture, like oxygen gas, spent nickel catalyst, soap stock, acid oil and gums, should also be restored as these were residues.

 
 

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First Published: Mar 09 2004 | 12:00 AM IST

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