The Hindu Business Line : Roll-back unlikely in edible oil levy

THERE is unlikely to be any roll-back of the eight per cent excise duty on branded and packed refined edible oils and vanaspati announced in the 2003-04 Union Budget. A hint to this effect was given by the Union Finance Minister, Mr Jaswant Singh, in his opening remarks to the discussion on the Finance Bill in the Lok Sabha on Friday.

"I had proposed a Cenvat of eight per cent on branded refined edible oils and vanaspati packed in sealed containers for retail sale. Certain distortions have been observed in the operation of the scheme. These will be rectified and I will inform the House at the time of the passage of the Finance Bill", Mr Jaswant Singh said.

The fact that the Finance Minister referred to the need to `rectify' some of the `distortions in the operation of the scheme' rather than doing away with the scheme per se is being seen as an indication that there is no move to roll-back or even reduce the eight per cent duty.

Instead, what is likely to take place is a uniform imposition of the duty on all refined edible oils and vanaspati packed for retail sale, irrespective of whether or not they are branded.

A section of the industry has been complaining that the levy of eight per cent excise duty only on `branded and packed' oils had led to a situation where some refiners were avoiding payment of duty by not mentioning the brand name in their packs. The packs merely mentioned the name of the manufacturer or refiner. As a result, branded edible oils and vanaspati makers were placed at a disadvantage.

The removal of distinction between branded and unbranded edible oils and imposition of the duty at the point of refining or hydrogenation will help `rectify' a major `distortion' that has crept up in the `operation of the scheme', it is being surmised.

The Finance Minister also announced that the Inter-Ministerial Group set up under the direction of the Prime Minister, Mr Atal Bihari Vajpayee, to formulate a comprehensive financial package for the ailing sugar industry would submit its report soon.

The Group, comprising officials from the Finance and Food Ministries, is expected to come out with a package similar to that announced recently for the plantation sector. Mr Singh said the package for the sugar industry would help cane growers in Uttar Pradesh, Maharashtra and Bihar.

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Roll-back unlikely in edible oil levy — Distortions to be rectified

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