Date:22/03/2008 URL: http://www.thehindu.com/2008/03/22/stories/2008032260780100.htm

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Import duty exempted for rice

Special Correspondent

NEW DELHI: Alarmed at the runaway inflation which has been surging mainly on account of soaring food prices, the government on Friday announced import duty exemption for rice, while slashing the levy for a number of edible oils, to not only hold the price line but also ensure that inflation is not “imported” into the country.

With the rate of inflation, as measured by the wholesale price index (WPI), spurting to 5.92 per cent for the week ended March 8, the government lost no time taking remedial fiscal steps.

According to a notification issued by the Central Board of Excise and Customs (CBEC) here, the government has exempted imports of semi-milled or wholly-milled rice from the hitherto prevailing duty of 70 per cent while drastically reducing the import duty on various kinds of crude and refined edible oils so as to cushion the impact of the increase in the global prices of these essential commodities.

The reduced levies have come into effect from the midnight of March 20/21. The duty exemption on rice imports will be available only up to March 31, 2009.

The import duty on crude palm oil, including crude palmolein, has been more than halved from 45 to 20 per cent.

The imports of refined palm oil, including RBD palmolein, would now attract a duty of 27.5 per cent as compared to 52.5 per cent earlier.

Likewise, the import duty on crude mustard, rapeseed, colza and canola oils has been slashed from 75 per cent to 20 per cent while the levy on their refined varieties has been pegged slightly higher at 27.5 per cent as compared to 75 per cent earlier. The duty on imports of crude sunflower oil imports has also been halved to 20 per cent from 40 per cent and its refined variety to 27.5 per cent from 50 per cent.

Explaining the rationale for the latest round of fiscal measures, a Finance Ministry statement said that the rising food prices in the international market had rendered it difficult for the government to import these items and yet contain inflation under the prevailing duty structure.