Chennai, May 14 Importers of edible oils are gearing up to challenge a notice from the Customs Department demanding four per cent countervailing duty (CVD) on all vegetable oils that have been brought into the country since December 7 last.
According to trading sources, many importers have got the notice, asking them to reply within seven days.
The department has issued the notice based on a Central Excise notification (59/2008 dated December 7, 2008) that levies four per cent excise duty on a slew of products.
“We are of the view that there is no CVD on import of edible oils. We think the claims of the department are not justified and we could challenge it,” the sources said.
Import of a product is subject to CVD if there is any excise duty on a similar one produced in the country. “There is no excise duty on edible oils. Therefore, the claims of CVD are not justified,” they said.
A spokesperson for the Central Board of Excise and Customs in New Delhi said the Government can recover duty within one year of the import of a product.
The question here, traders ask, is whether the Centre has imposed four per cent excise duty on edible oils as soon as polling got over across the country.
“The duty claims, all put together, could run into thousands of crores of rupees. It could also lead to hike in retail prices of edible oils at least by Re 1 a kg,” the sources said.
This dispute apart, there is another angle as to why importers want to challenge the notice.
“The Customs Department through a notification in 2006 said there was no need to pay CVD for import of edible oils. Now, how can CVD be sought or collected without a relevant notification to say CVD has been re-imposed?” they wonder.
A fresh notification will have to be issued if there is imposition of CVD, the sources said.
The CVD will apply to all vegetable oils that have been imported since December 7.
Vegetable oil imports have increased 64 per cent since the start of the current oil year in November to 42.92 lakh tonnes. From December 1 to April 31, imports totalled 37.37 lakh tonnes. Even if it is presumed that at least two lakh tonnes could have come into the country before December 7, then CVD will be applicable for the rest 35 lakh tonnes-odd imports.
On Thursday, crude palm oil in Malaysia dropped 3.8 per cent to $757.1 a tonne and traders here attributed the fall to the notice.
Source : Business Line