New Delhi: To protect domestic market, industry body SOPA on Monday demanded that the government curb illegal import of refined soybean oil and palmolein from Nepal at zero customs duty under a concession granted to least developed countries in the SAARC region.
India meets over 70 per cent of its domestic edible oil demand through imports. The country imports 15-16 million tonne of vegetable oils (edible and non-edible) annually.
However, goods exported to India by five least developed SAARC countries are fully exempt from customs duty.
In a representation to the Central Board of Indirect Taxes and Customs, the Soybean Processors Association of India (SOPA) said taking advantage of the exemption, the import of palm and soybean oils has started from Nepal at zero duty in "substantial quantities".
The industry body expressed concern that the large imports from Nepal are causing loss to the exchequer and also harming the industry and farmers.
SOPA also demanded that the Central Board of Indirect Taxes and Customs (CBITC) impose safeguard measures to protect the domestic industry.
"We would request you (CBITC) to kindly restrict the imports from Nepal only to those edible oils which are produced there and the 'Rules of Origin' should be strictly enforced for all imports at zero duty," SOPA said in the letter.
The palmolein imported from Nepal is of Indonesian and Malaysian origin and soybean oil is of South American origin, routed through Nepal by flouting the 'Rules of Origin' for getting the duty exemption for such imports, it said.
Further, Nepal has no production of soybean and has a very small capacity for crushing imported soybean. Nepal does not produce any palm oil, it added.
At current tariff value of USD 573 per tonne for refined palmolein, SOPA said the amount of customs duty being evaded is Rs 19,968 per tonne.
Similarly, the duty on refined soybean oil is Rs 25,195 per tonne. The loss to the exchequer because of this duty evasion would be huge.
Also, the imported soybean oil is being sold Rs 5,000 per tonne cheaper when compared with indigenous soybean oil and this puts the industry at a financial loss which it cannot bear, it added.
SOPA also mentioned that the import duty on edible oils was increased by the government to ensure a remunerative price to farmers and encourage them to produce more oilseeds, and consequently reduce the country's import dependency of edible oils.