Govt May Lose Rs 250 Cr Revenue From Edible Oil Imports Every Month

The government is likely to lose around Rs 200-250 crore a month in revenues from edible oil imports as traders have resorted to importing crude palmolein instead of crude palm oil (CPO) on which the finance ministry, in its bid to control under-invoicing, had imposed a fixed tariff value of $337 per tonne earlier this month.

The demand for edible oil is expected to boom during the ensuing festival season and between August and October will average 500,000 tonne a month, unchanged from the average for the first half of the year.

Crude palmolein, a derivative of CPO, can be easily replaced with the latter for the manufacture of vanaspati. Moreover, the commodity does not come under the new tariff value but enjoys a basic import duty of 75 per cent, making it cheaper to import.

The Centre had on August 3 fixed minimum tariff values for import of RBD (refined, bleached and deoderised) palmolein, RBD palm oil and crude palm oil at $372 per tonne, $351 per tonne and $337 per tonne, respectively. The estimated revenue from edible oil import of about 500,000 tonne per month at $350 per tonne with 75 per cent import duty would amount to around Rs 600 crore a month.

Sources said the finance ministry had rather erroneously failed to mention