NEW DELHI: The Food Ministry seeks Cabinet Committee on Economic Affairs' (CCEA) consideration over defreezing of the import tariff value of refined cooking oil RBD palmolein to increase competitiveness of domestic edible oil refineries.
The customs duty is determined on the tariff value as it is the base price. The government has kept import tariff value on RBD palmolein oil unchanged at $484 per tonne since July 2006, keeping in view inflation at that time. Currently, import duty on refined edible oils is 7.5 per cent.
In its proposal, the Food Ministry has suggested defreezing of import tariff value of RBD palmolein and linking it with the current global price.
At present, the government is not only suffering with revenue loss but also struggling with under-utilisation of domestic edible oil refineries as lower tariff value on imported refined palmolein has enhanced shipments in the previous few years.
The revenue collection is less as the government is imposing duty on RBD palmolein at a base price of $484 a tonne instead the current global price of $1,000 a tonne.
According to the industry experts, the increase in import of refined palm oil has also been due to lowering of export duty on the commodity by the Indonesian government.