According to a formal order, the finance ministry has extended the agricultural and infrastructure development cess and the basic concessionary customs tax on edible oils by six months to the end of March 2023.
The government issued concessionary import duties on crude soybean, crude palm, and sunflower oils in October 2021 and extended them until the end of September. According to the order, this has now been extended until next March.
In addition, the government had granted an exemption from the agriculture and infrastructure development cess on imported lentils until February. The government then extended this exemption from July until March 2023.
Consumers were granted comfort due to the cess and basic customs tax reductions because the price of edible oil had skyrocketed on international markets.
As a result, in addition to the 5% concessional cess on crude palm oil and the exemption from cess for lentils that were announced in October 2021, the basic concessional customs duty for soybean, sunflower, and palm oil that was announced in October 2021 also remains in effect. Edible oils in the “crude” category are completely exempt from customs duty. However, refined oils are subject to a 17.5% customs duty.
Data on inflation based on the consumer price index for July showed that the oils and fats category experienced 7.5% inflation. According to official data, food inflation in July was 6.75% compared to 3.96% in the same month last year.
To combat inflation, the Central Board of Indirect Taxes and Customs decreased the basic customs tax on palm oil and soy oil and the agriculture and infrastructure development cess in October 2021. This discount’s initial validity ended on March 31, 2022, but it was later extended through September 30, 2022. According to Saurabh Agarwal, Tax Partner at EY, “The government has extended this concession until March 31 2023, which would help to soften the prices of edible oils.”