Customs duty on wheat slashed from 50% to 5%

Reacting to the surge in wheat prices, the government today reduced the Customs duty on the commodity from 50 per cent to 5 per cent and placed it under the open general licence till the end of the year.

"It has been decided to allow import of wheat at a concessional rate of 5 per cent against a 50 per cent scheduled rate, with effect from today," an official statement said today.

The standards of quality applied to the imports will be the ones notified for public sector imports.

Atul Chaturvedi, president of Adani Exports' agro division welcomed the move, saying that it, along with wheat imports by the government, would lead to a fall in prices.

However, Veena Sharma, joint secretary of Roller Flour Millers' Federation of India, said the government had proposed to reduce the duty on wheat to zero.

Sharma pointed out that wheat, as a commodity, was more essential than sugar, on which the government had reduced the duty to zero. She conceded, however, that the move would ensure greater availability of wheat in the country.

Last week, the government had allowed import of pulses at zero duty till March 31 next year.

Sugar imports would not draw any duty but attract countervailing duty of Rs 850 per tonne till September 30 this year, before the new crushing season begins.

"Wheat, pulses and sugar are driving prices up, therefore, the decision has been taken to augment the supply side (through imports)," Finance Minister P Chidambaram had said, announcing a recent decision of the Cabinet's committee on prices.

The government has also suspended export of pulses till Diwali, which will fall in October.