11/8/06 (PTI)  New Delhi -   The Government today cut customs duty on crude palmolein from 80 per cent to 70 per cent.

Customs duty was also slashed from 90 per cent to 80 per cent (RPT) 90 per cent to 80 per cent on refined bleached deodorised palm oil, RBD palmolein and other refined palm oil.

The step has been taken to cushion the impact of increase in international prices of edible oils, a notification issued by the Customs Department said today.

The duty cuts are effective from today, the duty on crude palm oil, crude palmoein and other varieties of crude palm oil would be reduced to 70 per cent from the present 80 per cent.

In case of refined bleached deodorised palm oil, palmolein and other refined palm oils, the duty would be cut to 80 per cent from the present 90 per cent.

Recently, the Government had reduced customs duty on wheat imports, besides exempted sugar and pulses imports from cutsoms duty.

Depite the duty cut on edible oils, the landed cost of these oils would be higher than what it was in the first week of February due to surging global oil prices.

The duty has been cut to cushion the impact of the increase in global edible oil prices, a CBEC spokesperson told reporters.

The customs duty cut is likely to bring down prices by about Rs two per kg, the spokesperson said.

The tariff value crude palm oil, the basis on which import duty is charged has gone up from 417 dollars per tonne in the first week of February 2006 to 447 dollars per tonne.

Likewise, the tariff value of Refined Blended and Deodorised palmolein and crude palmolein have gone up from 421 dollars and 418 dollars per tonne to 484 and 481 dollars per tonne respectively.

Since tariff value of these oil imports was expected to go up in the coming months, the reduction might more or less be revenue neutral.

Palm oil imports accounted for nearly 40-45 per cent of the total edible oil imports in the country, which was put at around 4.2 million tonnes.

Total edible oil imports constituted about 40 per cent of the total edible oil requirement of about 10 million tonnes in the country.

The Government had increased customs duty on palmoil imports from 65 per cent to 80 per cent in February 2005. This is the first revision since then. The tariff value is reviewed every 15 days.

India is also a major importer of soya oil but the Government has retained customs duty at 45 per cent in a bid to protect the interest of Indian farmers. The WTO bound rate on soya oil is 45 per cent and Government has therefore no scope for increasing it.