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OILS AND FATS

Duty difference on Malay palm oil halved; Not applicable to Indonesia
Thursday, 03 January, 2019, 13 : 00 PM [IST]
Our Bureau, New Delhi
The notification issued recently by the Government of India, which stated that the duty difference on palmolein imported from Malaysia will be halved from 10 per cent to five per cent. However, the concession is not available for palmolein imports from Indonesia or any other Association of South-East Asian Nations (ASEAN) member nation.

The difference between the duty levied upon CPO and RBD palmolein is bound to affect the palm refining industry, because the same oil will attract different rates of duty from different countries of origin.

It must be noted that the government had inked agreements with Malaysia and other ASEAN nations in 2010 to reduce the import the import duty on palm oil effective January 1, 2019, and is honouring the same.

Notification Number 84/2018, dated December 31, 2018, provided deeper tariff concessions in respect of CPO and RBD palmolein imported from Malaysia under the India-Malaysia Comprehensive Economic Co-operation Agreement (IMCECA), effective January 1, 2019.

Similarly Notification Number 82/2018, also dated December 31, 2018, provided deeper tariff concessions in respect of CPO and RBD Palmolein imported from ASEAN countries under the India-ASEAN Free Trade Agreement, effective January 1, 2019.

The overall effective duty reduction is 4.4 per cent for CPO, but the duty reduction in case of RBO palmolein imported from Malaysia would be 9.9 per cent, while from Indonesia, it would be 4.4 per cent. The duty reduction has reduced the effective duty difference between CPO and RBO palmolein to just 5.5 per cent against the previous 11 per cent as under:
 
The new import duty structure, effective January 1, 2019, is as follows:


Oils

Old Effective Duty             
Duty+Social
= Effective Welfare Duty Cess

Revised Effective Duty
 
Duty+Social
= Effective Welfare Duty Cess


Change in
Duty

 

 

Malaysia

 

 

 

Crude Palm Oil

44%+10% = 48.4%

40%+10% = 44%

(-) 4.4%

RBD Palmolein

  54%+10% = 59.4% 

  45%+10% = 49.5%

(-) 9.9%

 

 

 

 

Indonesia

 

 

 

Crude Palm Oil

  44%+10% = 48.4%

  40%+10% = 44% 

(-) 4.4%

RBD Palmolein

  54%+10% = 59.4%

  50%+10% = 55%

(-) 4.4%



This decision of the government is contrary to the Make in India efforts of Prime Minister Narendra Modi, and would also seriously stymie the efforts at improving palm cultivation in the country. It will also harm the interests of the oilseed farmers, who were getting enthused of late with relatively high import duties.
 
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