Tax break likely for Indian Olive Oil Importers
By Dilip Kumar Jha,
The finance ministry will shortly issue a clarification, stating that olive oil imports will not attract any import duty. This follows summons issued by the Directorate of Revenue Intelligence (DRI) to several olive oil importers, asking them to pay an additional 37.5 per cent customs duty on all imports made since April this year.
Sources familiar with the developments said the customs department went through the issue and found that “extra-virgin” olive oil is categorised under 1509 of the harmonised system (HS) code, followed globally for standardisation. As per the notification by the ministry on April 1, goods imported under HS code 1509 are considered as crude and therefore, attract ‘nil’ duty.
However, due to a lack of clarity on the issue, DRI was charging 7.5 per cent customs duty, but recently asked the importers to pay the differential.
This created panic among importers of olive oil. In the Prevention of Food Adulteration Rules, 1995, the government has laid down the definition of olive oil as “the oil obtained from the fruit of the olive tree by mechanical or other physical means under conditions, particularly thermal which do not lead to adulteration of the oil.”
The rules also state virgin olive oil is suitable for consumption in the natural state without refining. It shall be clear, yellow to green in colour, with specific odour and taste, free odour or tastes indicating alteration or pollution of oil.
“There is a Supreme Court judgement in this regard, which we followed, and asked importers for differential duty and hence, there is no violation of notification in this regard,” said the signatory of the summons Atanu Choudhury, Senior Intelligence Officer of DRI without divulging details of the judgment.
Meanwhile, trade sources are hopeful that with the inspection by the customs department, they will get a refund of the tax paid since April this year. “We will surely get a refund of 7.5 per cent duty that we have been paying on import of extra virgin olive oil since April, provided the government issues notification, sooner or later,” said V N Dalmia, president of Indian Olive Association.
India meets its 100 per cent demand through importers mainly from Europe. Confined largely to high-end consumers, olive oil is now gaining popularity among consumers because of its health benefits.
[Source] Click here
Posted
on
Wednesday, December 10th, 2008 at 3:25 pm under
