Assocham seeks waiver of 8% excise duty on vanaspati

NEW DELHI: Assocham on Friday sought restoration of exemption available to vanaspati and withdrawal of the eight per cent excise duty which the chamber considered "very steep".
In case withdrawal of the excise duty was not acceptable, the chamber suggested duty on vanaspati at a fixed rate of Rs 500 per tonne since no money credit for use of unconventional oils is currently available.
"Imposition of eight per cent excise duty on vanaspati, which is an item of mass consumption and extensively used by the rural poor, is very steep as it works out to Rs four per kg and about Rs 3,500 per tonne," it said in a release here.
The vanaspati industry was already facing stiff competition from free import of Nepalese vanaspati and large scale manufacture of refined palm oil, a cheaper substitute of vanaspati.
"The discriminatory levy of excise duty based on brand name will distort the prices of vanaspati besides creating a dual system of manufacture and marketing in branded and non- branded vanaspati and encourage various modalities to evade excise including conspicuous omission of brand names," the chamber said.
It further demanded removal of distortions in rate of excise duty on branded food products as against unbranded goods and between packaged and loose products.
The discriminatory rate of excise duty was also against public interest as it had a direct bearing on peoples'' health, it said.