Budget 2012: Increase Availability of Vegetable Oils From Domestic Resources, says FICCI Close.

NEW DELHI: To bridge the gap between demand and supply, country is compelled to import a large quantity of edible oils. India has become the largest importer of vegetable oils in the world. During November, 2010 to October, 2011 (2010-11) country import is likely to be about 88/90 lakh tonnes of edible oil worth Rs 35.000 crores, a huge burden on exchequer next to crude petroleum products and gold.

FICCI in its pre-budget memorandum has said that it is essential to increase the availability of vegetable oils from domestic resources by encouraging diversification of land from food grains to oilseeds, increasing productivity of oilseeds and fullest exploitation of non traditional domestic sources. For this, FICCI recommends that the government may consider the following for the ensuing Union Budget:

> Recently, Ministry of Finance amended the Point of Taxation Rules 2011 by Notification No. 41/2011-Service tax dated 27th June, 2011 by which brokers are liable to pay service tax on brokerage in the succeeding month. In view of stringent Service Tax requirements, enforcement of amended rules would seriously hit the brokers' community of the vegetable oil industry and trade, as edible oil and extraction trade is mostly on cash basis of accounting. Central Government may permit the payment of Service Tax by brokers on receipt basis as being allowed to Chartered Accountants, Company Secretaries, Lawyers etc. who have been given exemption from this rule.

> Government to allocate Rs 2500 crores per year for next three years to achieve visible impact on oilseeds production and productivity.

> Need re-alignment of tariff value for Edible Oils and need to increase import duty.

> Review and withdraw the export duty on deoiled rice bran.

> Imports of crude palm oil - drop bond condition.

> General exemption from Excise Duty be granted to "refining of vegetable oils and manufacture of vanaspati."

> Grant general exemption from Excise Duty to "refining of rice bran oil and processing of its by products" with a view to encourage value-addition in this area.

> Food grade hexane (No. 2710.12) used in the processing of oilseed and oil bearing material be exempted from the purview of excise duty or reduce excise duty to 8% from the present level of 14%.

> Sensitive essential items of mass consumption like edible oils and oilseeds should be either exempted or taxed at lower rate under the proposed GST structure and should be uniform for all States.

> Consumables such as coal, fuel oil, diesel etc. are directly used in the process of manufacturing and hence should be treated as inputs and credit of VAT paid on these items should be permitted.

Source : economictimes.indiatimes.com