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Crude palm and its fractions at present attract a concessional rate of customs duty of 65%. This rate, however, is subject to condition that the imported crude palm oil and its fractions meet the prescribed specifications. These specifications interalia required that the imported oil must have a carotenoid content (as beta carotene) in the range of 500mg/kg to 2500mg/kg and have an acid value of 2. Such specifications were primarily prescribed to discourage import of refined palm oils in the guise of crude palm oil. Industry has been representing that crude palm oil or its fractions meeting carotenoid content in the prescribed range are not available in the international market, and if such oil is available, the carotenoid content gets reduced during handling and transportation.
Taking into considerations industry representations, the Central Government has revised minimum carotenoid content from 500mg/kg to 250mg/kg and acid value from 2 to 4 for crude palm oil, for being eligible for the concessional rate of 65%. This, however, will be subject to actual user conditions i.e. for manufacture of refined oil, refined palmolein, vanaspati, bakery shortening or inter-esterified fats only.
Present specifications of carotenoid content (as beta carotene) of 500mg/kg to 2500mg/kg will however, continue for crude palmolein, with a revised acid value of 4 and subject to actual user condition i.e. for manufacture of refined oil, refined palmolein, vanaspati, bakery shortening or inter-esterified fats only.
Notification No.7/2005-Customs dated 4th February, 2005 has been issued in this regard. Change in specifications of crude palm oil and crude palmolein have come into effect from 4th February, 2005.
BSC/BY- 36/05
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