Chennai: Illegal import of edible oil through porous borders is causing Rs 2,000 crore loss to the exchequer, says industry.

The Soyabean Process-ors Association of India has raised its concerns over illegal imports of edible oil from Nepal, Bangladesh, Sri Lanka and other SAARC countries without paying import duty.

“Some unscrupulous importers are blatantly misusing the facility of duty free import of edible oils from five SAARC countries and importing large quantities of edible oils from Nepal, Bangladesh and Sri Lanka, without following the mandatory Rules of Origin for enjoying exemption from duty. This is causing huge custom duty evasion which may be over Rs 2000 crore this year,” SOPA said in a letter send to Prime Minister Narendra Modi.

The government had increased the import duty on edible oil to protect the domestic industry. The duty-free imports are negating the advantage of customs duty increase on edible oil, which was imposed to help farmers realise remunerative prices. The illegal imports are not only causing customs duty evasion but also  outflow of foreign exchange, SOPA said.

Last year, the government had hiked import duty on edible oil to help farmers realise higher price for their oilseeds. Compared to January 2018, import duties on edible oils are around 200 per cent higher and are currently ranging between 44-54 per cent. The duties on soya oil, sunflower oil, rapeseed oil, crude palm oil and refined palm oil are in this range.  However, SAARC countries can export edible oil duty-free to India, but this is limited to oil produced within those countries. SOPA finds that this Rule of Origin clause is not followed strictly.

SOPA said that it had bought this to the notice of the ministries of Finance, Commerce and Agriculture and Central Board of Indirect Taxes and Customs, but the imports have been continuing with impunity and have increased in recent months. The industry finds that illegal imports will put pressure on domestic prices.