Stop duty-free import of edible oil via Nepal, Bangladesh, Indian body urges PM, FM

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Updated: October 23, 2019 7:21:17 AM

BV Mehta, executive director, SEA, said that goods exported to India by 5 least developed SAARC courtiers are fully exempt from customs duty, and taking advantage of this exemption, imports of palm and soyabean oil had started from Nepal and Bangladesh at zero duty in substantial quantities.

According to the association, what started as a trickle has now assumed alarming proportions and is not only threatening the very survival of the refining industry in eastern and northern India but also resulting in huge revenue loss to the government.

Protesting against the alleged influx of edible oil into the country through Nepal and Bangladesh, the Solvent Extractors Association of India (SEA) has approached Prime Minister Narendra Modi and finance minister Nirmala Sitharaman, seeking government intervention. The association has urged the government to take immediate and strong action to ensure duty-free import of edible oils are not allowed.

According to the association, what started as a trickle has now assumed alarming proportions and is not only threatening the very survival of the refining industry in eastern and northern India but also resulting in huge revenue loss to the government. “It is harming the interests of oilseed farmers as it results in distorting our markets and the very purpose of keeping high import duties on edible oils is getting negated,” the association said in a note to the PM.

BV Mehta, executive director, SEA, said that goods exported to India by 5 least developed SAARC courtiers are fully exempt from customs duty, and taking advantage of this exemption, imports of palm and soyabean oil had started from Nepal and Bangladesh at zero duty in substantial quantities.

“Nepal has no production of soybean and a very small capacity for crushing imported soybean. Nepal does not produce any palm oil. The palmolein being imported from Nepal is of Indonesian and Malaysian origin and soybean oil is of South American origin, routed through Nepal or Bangladesh by flouting the rules of origin for getting the duty exemption for such imports,” Mehta said in the representation.

“The current import duty on refined palmolein is 50% and on soya refined 45% plus swachh bharat cess @ 10%. At current values, this means for each tonne of refined soybean oil coming via Nepal, about Rs 24,000, and on palmolien, approximately Rs 21,000/pmt of revenue is lost by the government of India,” he said.

“In other words, import of average 20,000 tonne of soybean oil and palm oil, the country is losing the revenue of nearly Rs 45-50 crore per month. If this trend continues, we can be sure this figure will cross Rs 100 crore of revenue loss per month,” he said.

Mehta said that the recent action of imposing 5% safeguard duty on palmolien coming from Malaysia was a reflection of resolve of the country and therefore this blatant and systematic gaming of the system cannot be allowed to continue to the detriment of the national interests.

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