witha view of maintaining stable domestic coconut prices, the Finance Ministry has increased Special Commodity Levy (SCL) for palm oil by Rs.20 to Rs. 175 from Rs.155 recently, official sources said.
Palm oil imports increased by 41 per cent YoY to 89,959 metric tons as a result of bringing down the SCL previously, Finance Ministry revealed.
The move is aimed at protecting local coconut industry a senior treasury official said adding that’ several desiccated and oil mills in the country had to stop production due to high prices of coconuts.
The palm oil import racket that has been carrying out for several years has been exposed recently and the government’s move will also help the custom authorities in combating this mal practice ,
Some unscrupulous importers have been showing that they were importing unrefined palm oil by mixing crude oil with the palm oil in order to obtain a tax rebate.
By mixing the crude oil these importers have continued to hoodwink the Sri Lanka Standards Institute(SLS) indicating it was unrefined oil based on the ‘1 percent standard’ which allows 1 percent crude oil mixing .
But these palm oil importers are used to mix crude oil shifting two decimal points in the SLS ‘1 percent standard’ certification.
The country has been deprived of millions of rupees in tax money annually by this mal practice , he said noting that this loop hole has now been closed.
Retail prices of a coconut are around 60 rupees a nut in August down from 85 rupees in January this year.
Average price for 1,000 nuts which was Rs. 64,156 in January 2018 had fallen to around Rs 45,000 recently.
Coconut oil mills had also halted production with the increase in prices of coconuts previously while the oil production was down by about 67 percent.
A decline in coconut oil production has resulted in more palm oil imports which are a substitute for coconut oil.
The reduction of the commodity levy for palm oil previously was aimed at promoting value added palm oil exports from Sri Lanka, a senior treasury official said, adding that at least two key palm oil companies in the island are processing crude oil for the export market.
A decline in coconut oil production has resulted in more palm oil imports which are a substitute for coconut oil, industry source said pointing out increasing the SCL on palm oil imports will not develop the local desiccated coconut industry.