Industry seeks CTT exemption on veg oils
Vegetable oil industry body SEA has sought that the government keep processed agri-items, especially soybean oil, palm oil and castor oil, out of the ambit of commodity transaction tax (CTT).
New Delhi: Vegetable oil industry body SEA has sought that the government keep processed agri-items, especially soybean oil, palm oil and castor oil, out of the ambit of commodity transaction tax (CTT).
Effective July 1, the government has notified CTT of 0.01 percent to be levied on all derivative contracts of non- agricultural commodities and processed food items transacted through recognised commodity exchanges.
The government, however, exempted 23 specified agri- commodities from CTT. These include cotton seed oilcake, copra, mustard seed, soybean and soymeal.
"Unfortunately, certain agri commodities like soybean oil, RBD palmolein, castor oil and cotton seed are missed out from the exemption," Mumbai-based Solvent Extractors Association of India said in a letter to its members.
SEA said it has strongly represented to the Department of Consumer Affairs as well as the Forward Markets Commission (FMC) to re-look at the list of exempted agri-commodities.
The industry body said that CTT would further add to the tax burden and discourage value chain participants from hedging their price risks on the commodity bourses. It would expose them to uncertainties arising from demand-supply situation in domestic and global market.
The processors already pay 5 percent value added tax (VAT) on refined oil. Also, there is state defined mandi tax applicable on purchase of soybeans and other oilseeds across India, it added.
To boost export of edible oil in consumer packs, SEA has suggested the government to either do away with minimum export price (MEP) for edible oil in consumer packs or lower the price to USD 1100-1200 per tonne from the existing USD 1500 per tonne.
It also sought bulk export of all edible oils, at least rice bran oil on a trail basis as this will help paddy growers to realise better value for byproducts.
On oilseeds sowing in the ongoing 2013-14 crop year, SEA said area under various oilseeds is expected to be higher by 5-7 percent as compared to last year as major growing states have received good rains so far.
"If rain continues at intervals during August and September, India may harvest a record oilseeds crop this year," it added.