Edible oil will be cheaper: Custom duty and cess on soybean and sunflower oil imports will be abolished for 2 years; Currently 60% of the requirement is imported

On Tuesday, the central government took a big decision regarding the prices of edible oil. The government has announced the abolition of custom duty and Agriculture Infrastructure and Development Cess for two years on the import of 20 lakh metric tonnes of soybean oil and sunflower oil. This cess is currently 5%.

The decision is expected to make cooking oil cheaper. The exemption given on the import of oils will be applicable till March 31, 2024. Edible oil is the major contributor to inflation and the retail price of edible oil has registered a rise of more than 15 per cent for the last three months.

Relief from judgment
According to the notification issued by the Finance Ministry on Tuesday, import tax will not be levied on 2 million tonnes of crude soybean and sunflower oil annually in the financial years 2022-23 and 2023-24.
The Central Board of Indirect Taxes and Customs (CBIC) wrote in a tweet, this decision will provide significant relief to consumers.

It is to be known that the government had reduced the excise duty on petrol and diesel last week amid rising oil prices. Along with this, it was also decided to remove the import duty on some raw materials used in the steel and plastic industry.

Government has limited options

The government has taken this step to reduce the rising edible oil prices in the local market. The government uses the cess to raise money for infrastructure projects related to agriculture. The government has limited options like removing the tax on imports and abolishing the cess to bring down oil prices.

Oil became so expensive in 6 years

Almost every business was affected for 2 years in the Corona period. Jobs also gone. Savings of middle class families ended. In such a situation, the families already burdened with financial burden are now injured by the fast pace of the market. In such a situation, it has become difficult for the housewives to maintain the kitchen budget. The prices which were in 2016 have not doubled, but the prices of many food items have more than tripled.

Tax on base import abolished
India has already abolished base import tax on most edible oils, including palm oil and soybean oil. Along with this, inventory limit has also been imposed to prevent hoarding.
Oil prices have risen in the international market since Russia’s attack on Ukraine.

Supply stopped from Black Sea region
The supply of sunflower oil from the Black Sea region has stopped due to the attack. India currently imports 60% of its edible oil requirement. The biggest challenge before the central government is to contain the rising inflation. In April, wholesale inflation in the country reached the highest level in three decades.