India’s Premier Vegoils Industry Association Opposes Hike on GST on Coconut Oil

The Solvent Extractors’ Association (SEA) of India has opposed the proposed changes to the GST rate for classification of edible coconut oil saying it will be detrimental on the interests of coconut farmers and industry, The Hindu BusinessLine reported on September 16.  As proposed, the tax rate would be raised to 18 per cent on coconut oil sold in packs below 1000 ml, while it would remain at 5 per cent on coconut oil sold in the packs above 1000 ml.

In a letter to the Union Finance Minister, SEA President, Atul Chaturvedi, stated that coconut oil is classified under FSSAI (Food Safety and Standards Authority India) as edible oil.  Requesting the GST Council to have uniformity of application of GST regulations, he said all packs of coconut oil, irrespective of size, must be treated equally and continue to be taxed at uniform rate of 5 per cent applicable to edible oils.   

All pure edible oils such as coconut oil, mustard oil, olive oil etc., have multiple uses, including as a cooking medium, and these oils are also packed in smaller sizes of 50 ml to 1000 ml.  Levy of a higher GST rate of 18 per cent on coconut oil packs up to 1000 ml may encourage sale of loose oil, which the Government has banned, being susceptible to adulteration and hoarding.  Both will lead to inflation impacting weaker sections of the society that consume coconut oil, he said.