9/16/04 INDIA (Oilmandi )- The government tonight announced anacross-the-board cut of about 10 per cent in the tariff value of edibleoil imports in an attempt to keep prices under check. The governmentexpects to lose revenue of Rs 600-700 crore due to the cut.

We have taken some steps on edible oil. The tariff value for edible oilhas been adjusted and on an average there will now be a reduction of $50.I hope that this adjustment gets reflected in the prices, Finance MinisterP Chidambaram told reporters after a meeting with Prime Minister ManmohanSingh.

Moreover, Chidambaram also announced that now one half of the Customs dutyon edible oil imports could be paid through the duty entitlement passbook(DEPB) scheme and the other half by cash.

Officials said the decision to impose a limit on the use of the DEPB scripto pay import duty is being taken as the scrip is increasingly being usedto pay import duty on the product in lieu of cash, thereby causing revenueloss to the government.

Official sources, however, said there was no proposal to cut Customs dutyon edible oil.

Tariff value is the base price on which duty is imposed on edible oils. Toprevent under-invoicing by importers, the government imposes Customs dutyon palm and soya oils at a fixed rate, irrespective of the price at whichthey are imported.

The fixed base price or tariff value is revised in accordance withinternational prices of the commodity. It has not been changed for thelast seven months despite an over $100 per tonne fall in global prices.

India consumes 11 million tonnes of edible oil, of which nearly 50 percent is imported.