New Delhi , Sept. 22 - THE confusion over what is the duty applicable onimported crude palm oil (CPO) consignments not meeting the minimum 500-mgper kg of total carotenoids specification, shows no signs of abatement.

Following the reported move by the Chennai Customs to charge a duty of 85per cent on such consignments, it is now learnt that the authorities inJawaharlal Nehru Port Trust (JNPT) have gone a step ahead and are levyinga 100 per cent import duty.

"They are asking us to furnish a bank guarantee for the difference between100 per cent and 65 per cent," said an importer.

CPO, classified under heading 15.11.10.10 of the Customs Tariff, iscurrently assessable to 65 per cent duty. However, this is subject to itconfirming to the definition of "crude palm oil and its fractions, ofedible grade," as per the Revenue Department's notification dated August1, 2003. And that, in turn, requires the oil to have "an acid value of twoper cent, or more and total carotenoid (as beta carotene) in the range of500-2,500 mg per kg, in loose or bulk form."

On the other hand, both RBD (refined, bleached and de-odourised) palm oiland RBD palmolein falling under the heads 15.11.90.10 and 15.11.90.20,respectively attract 75 per cent customs duty. The Customs Tariff doesnot, at the same time, explicitly specify any duty on CPO not confirmingto the definition contained in the August 1, 2003 notification.

As a result, individual ports are making their own interpretation of whatis the appropriate duty to be imposed on CPO not meeting the minimum 500mg per kg carotenoids specification. The confusion is compounded by thefact that over 80 per cent of the CPO consignments being imported now, arefailing the carotenoid test, which means they cannot technically beclassified as CPO, qualifying for 65 per cent duty. Further, they cannotalso be categorised as refined oils under 15.11.90.10 and 15.11.90.20,attracting 75 per cent.

The importers (mainly vanaspati-makers and other vegetable oil processors)claim that CPO not meeting the minimum carotenoid standards would fallunder the head 15.11.90.90 of the `other.' The duty applicable againstthis head is 75 per cent, as it is for RBD palm oil (15.11.90.10) and RBDpalmolein (15.11.90.20). In any case, the import duty on CPO irrespectiveof whether or not it confirms to the official definition cannot be higherthan what it is on the final product, i.e RBD palmolein, they say.

But with the Central Board for Excise and Customs (CBEC) yet to issue aformal clarification on the issue, individual commissionerates are drawingtheir own interpretation of what duty may be levied on CPO consignmentsfailing the carotenoid test.

"As it is, they are under tremendous pressure to meet revenue targets. Andgiven the sheer quantum of imports taking place, edible oils provide anideal target," industry observers pointed out.

Edible oil imports annually fetch around Rs 7,000 crore of customs revenuefor the Government, of which the palm complex accounts for over Rs 5,000crore and the rest being contributed by crude soyabean, sunflower andother `soft' oils. This is incidentally higher than the combined Plan andnon-Plan Budget of all departments under the Union Agriculture Ministry,which adds up to Rs 5,303.41 crore during 2004-05.