Remove VAT on coconut oil to level imbalance
Ramani KANGARAARACHCHI
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Chairman Tharaka Dadagamuwa, Renuka Group Ranjith Rajiyath, DC
Millers Felix Fernandopulle, Nestle Priyadarshani Karunaratna,
Haycab R.P. Peiris. Picture by Sumanachandra Ariyawansa
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The Coconut Products Trader’s Association insists the removal of
import duty, VAT and Cess on all edible oils including Coconut oil with
immediate effect, until end of this year in order to create a level
playing field among all the industries to come out from the existing
imbalance.
Currently the export of coconut products have virtually come to a
standstill making a loss of foreign exchange worth of Rs. 1.5 billion
from January to March and the market share in the international market.
This was revealed at a press conference held yesterday at Grand
Oriental Hotel Colombo organised by the Association. A number of
representatives of leading companies pointed out the serious situation
that has occurred.
Chairman Coconut Products Traders Association, Taraka Dadagamuwa said
nearly 12,000 workers employed directly and indirectly in the coconut
products export sector have lost employment.
Dadagamuwa said a consumer is presently paying Rs. 310 per kg for
coconut oil whereas the price of coconut oil in the international market
is around Rs 170 per kg. A consumer in Sri Lanka is paying nearly 82 per
cent more for coconut oil accordingly.
The reasons for the current situation had been the low coconut crops
levels during the period October to March resulting low export levels.
However this year the exports have virtually come to a standstill.
Secondly the surplus coconuts available presently are channeled only for
coconut oil production at the expense of the export industries and the
coconut oil industry is heavily protected by tariff barriers.
DC Millers representative Felix Fernandopulle said imported edible
oils are subject to import duty of 28 per cent surcharge 15 per cent on
duty, VAT 15 per cent Cess Rs. 6000 PMT and other levies adding up to 65
per cent of the CIF value.
However if the duties and other levies are removed refined coconut
oil can be imported at a cost of Rs. 175,000 PMT and refined Palm oil
can be imported at Rs. 1,555,000 PMT on prevailing world market prices.,
by which the price of locally produced coconut oil can be brought down
to around Rs. 175,000 PMT.
Similarly if Coconut oil price is Rs 175,000 PMT in the domestic
market the equivalent price of Coconuts will be averaging around Rs. 22
per nut. and this is well above the current cost of production.
At the same time the consumer in Sri Lanka will be paying around Rs.
25 per nut and the export industry can also secure nuts at workable and
compete in the world market,” he said. |
