Maharashtra - Exempt edible oils from VAT: SEA

Following the removal of import duty on edible oils by the Central government, the Solvent Extractors” Association of India (SEA) has requested the chief ministers of the leading states producing oilseeds to exempt oilseeds and edible oils from VAT, other state taxes, and levies to reduce the price of edible oil, thereby giving additional relief to the consumers.

There is an element of 4% VAT on edible oils/oilseeds plus octroi and other local taxes on edible oils imposed by the state government, which accounts to nearly 6 to 7%, amounting to Rs 4 to 4.50 per kg on edible oils. If edible oil is exempted from VAT and other taxes by the state government, the price of edible oil can further go down by Rs 3 to 4 per kg.

In a memorandum sent to the chief ministers of leading states, the association has said that in the wake of the recent price rise in food items and rising inflation, the Centre has taken various measures, including abolition/reduction of import duties on edible oils and restriction on exports to contain the prices. These measures have resulted in bringing down prices to a certain extent, as the trade and industry has immediately passed on the benefits to the consumers.

Last month, the Central government removed the import duty on crude edible oil and reduced the duty on refined edible oil to 7.5%, to reduce the prices of edible oil at the cost of revenue loss of Rs 6,000 to 7,000 crore per annum. This had an immediate sobering impact on the domestic price of edible oils and practically, most of the popular oil prices reduced by over Rs 10,000 per tonne in the wholesale market.

Source : Financial Express - Bombay, India,  dated 01/05/2008