21/2/06 New Delhi, (PTI)  -  A panel set up by the government today proposed a uniform 72.5 per cent import tariff for all edible oils, except soya, besides a nominal 7.5 per cent duty differential between crude and refined oils.

Favouring a stable duty structure for at least five years, the committee headed by chief economic adviser Ashok Lahiri recommended the duty on vanaspati be raised from 30 to 72.5 per cent in a bid to deal with the major problem of “inverted duty structure”.

It, however, suggested retaining a 45 per cent duty for soyabean oil as decided at the WTO.

The committee has suggested a uniform 72.5 per cent for all other edible oils as the WTO-bound level was much higher ranging from 75 per cent for rape seed and mustard oil to 300 per cent for palmolein, palm oil, sunflower and coconut oil.

The representative of the department of agriculture and cooperation has, however, sent a dissenting note indicating that the proposed 72.5 per cent for edible oil cannot be supported and in fact the rate needs to be raised.

Regretting that wide dispersion of rates and lack of stability in edible oil duties following frequent changes, it said considerably lower duties on soyabean oil at 45 per cent and 80 per cent duty on crude palm oil has led to large import of costlier soyabean oil leading to higher import bill and lower revenue.

For instance, it was “privately profitable” to import soybean oil at a higher price of $415 per tonne than crude palm oil at $380 and suffering a forex outgo of 35 per tonne and a revenue loss of Rs 5,357 per tonne.

The duty differential for imported palm oil due to bilateral trade treaties has put the domestic industry at a disadvantage, the committee said.

The duty on palm oil is 80 per cent in India, while it is duty free in Sri Lanka and Nepal.

While voluntary export restraints constitute a way out, Lahiri committee said their track record internationally has not been very good.

“A durable solution lies in convergence of external tariffs in the entire South Asia Free Trade Area making it a customs union,” it said.