In order to safeguard domestic market, Soybean Processors Association of India (SOPA) has asked the government to curb illicit import of refined soybean oil and palmolein from Nepal at zero customs duty under a concession given to the least developed nations in the SAARC region.
India meets more than 70% of its domestic edible oil demand through imports. The country imports 15 to 16 million tonne of vegetable oils (edible & non-edible) per annum. However, goods exported to India by 5 least developed SAARC nations are completely exempted from customs duty.
The Soybean Processors Association of India in a representation to the Central Board of Indirect Taxes and Customs (CBITC) said taking benefit of the exemption, palm and soybean oils import has begun from Nepal at zero duty in “considerable quantities“.
SOPA has expressed fear that the large imports from Nepal are causing loss to the exchequer & also harming the farmers and industry. The industry body also demanded that the Central Board of Indirect Taxes and Customs impose safeguard measures to guard the domestic industry.
In a letter it said, “We would request the CBITC to kindly limit the imports from Nepal only to those edible oils that are produced there and the ‘Rules of Origin’ must be strictly enforced for all imports at zero duty”.
It also said that the palmolein imported from Nepal is of Malaysian and Indonesian origin and soybean oil is of South American origin, routed via Nepal by breaking the ‘Rules of Origin’ for obtaining the duty exemption for such imports.
Nepal has no production of soybean and has a small capacity for crushing imported soybean. It does not produce any palm oil.
At present tariff value of USD 573 / tonne for refined palmolein, SOPA said the amount of customs duty being eluded is Rs 19,968 / tonne. Likewise, the duty on refined soybean oil is Rs 25,195 / tonne. The loss to the exchequer due to this duty evasion would be vast.
In addition, the imported soybean oil is sold at Rs 5,000 / tonne cheaper if compared with local soybean oil & this puts the industry at a financial loss which it cannot bear.
SOPA also told that the import duty on cooking oils was raised by the centre to guarantee a remunerative price to farmers and motivate them to produce more oilseeds and consequently cut the country’s import dependency of edible oils.
