Increase in duty on soybean oil import: parliamentarians approached for withdrawal

The edible oil industry has approached parliamentarians for immediate withdrawal of increase in customs duty on the import of soybean oil proposed in Finance Bill 2018-19, to avoid sudden increase of Rs 5 per kg or litre in price of ghee/cooking oil. In this regard, the industry of ghee and cooking oil held a number of meetings with different parliamentarians at the Parliament House here on Tuesday.
According to a communication of Umer Islam Khan Secretary General Pakistan Vansapati Manufacturers Association (PVMA) to the Members of Senate/National Assembly, it is to bring into attention of Members of NA/Senate that soybean seed (for extraction of soybean oil) and Crude Degummed Soybean Oil are imported to partially meet the national demand of cooking oil & ghee. Due to recent devaluation of Pak Rupee, prices of end products witnessed an increase up-to Rs 8/kg or liter. Instead of providing some relief to masses by decreasing rate of duty/taxes on Soybean Oil, in the Finance Bill 2018-19, it is proposed to further increase the custom duty on soybean oil from of existing Rs 9,050 to Rs 12,000 per M. Ton ie an increase of over 32% thus totaling up to Rs 35,000 per M. Ton. Alone this increase would result into enhancement of Rs 5/kg or liter of ghee/cooking oil, whereas duty structure on imported soybean seed and oil extracted from it @ Rs 7,100/- has remained un-changed.
Hence unilateral increase in custom duty on import of soybean oil only, its import will diminish and shall be replaced by increase in import of soybean seed, to meet the demand of soybean oil. Resultantly not only manufacturers will have to rely on singular source, which is enjoying large scale concession in duty/taxes, but national exchequer will also be deprived of Rs 15 to 20 Billion per annum with no relief passed on to masses.
Please also take into account that already local oil seed crop is suffering heavily due to reduced rate of tax applicable on imported oil seeds against the stipulations of National Tariff Commission (NTC), hence material injury to Pakistan's agriculture sector, Umer maintained.