Tamil Nadu strongly opposed the move to increase GST rate on packed edible coconut oil of less than one litre to 18 per cent from 5 per cent, terming the proposal anti-poor, anti-Southern States, which produce bulk of the coconuts, and anti-Indian as it will support other imported oils.
“The fundamental principle of fairness demands that we cannot single out a south-Indian centric domestic oil for a 360 per cent GST rate increase, while leaving other Indian and imported oils at 5 per cent,” the State Finance Minister Palanivel Thiaga Rajan said at the 45th GST Council Meeting on Friday. The Fitment Committee recommended that keeping in mind the general consumer usage pattern of such products, that coconut oil, when packed and sold in a unit container of less than 1 litre may be classified as hair oil (under Chapter 33), attracting a GST rate of 18 per cent irrespective of its actual end use. The edible coconut oil, when packed and sold in a unit container of one litre or above, is subject to GST at the rate of 5 per cent.
“We find this recommendation to be perverse and lacking in either logic or fairness. In fact, we will go so far as to consider this decision to have been made with bad faith intent, against the interest of Tamil Nadu which is one of the largest producers of coconuts and coconut oil, and indeed many of the southern states such as Kerala, Andhra Pradesh and Karnataka,” Rajan said.