TN Finance Minister Slams Centre For Proposal To Raise GST For Coconut Oil To 18%, Calls It Anti-South

The proposal imposes GST of 18% for coconut oil packed in a container less than 1 liter by classing it as hair oil while imposing 5% GST for coconut oil packed in container 1 liter or above.

Tamil Nadu Finance Minister Palanivel Thiyaga. (File Photo)

Chennai: Tamil Nadu Finance Minister Palanivel Thiyaga Rajan vehemently opposed the proposal to impose 18% Goods and Service Tax for coconut oil based on the size of packaging and said that the move is anti-south and anti-poor. The Minister who was unable to attend the GST council meeting on Friday sent the objection in a written format on Friday to impose GST by classifying coconut oil as edible and non-edible based on the size of the container. 

In the letter on Friday, the Minister mentioned the recommendation of Fitment Committee verbatim which said, "Coconut oil, when packed and sold in an unit container of less than 1000 milliliter maybe classified as hair oil (under Chapter 33), attracting a GST of 18% irrespective of the use." 

"Meanwhile, the edible coconut oil, when packed and sold in a unit container of 1000 milliliter or above be subject to GST of 5%," the recommendation said. 

Quoting this, the Minister said that the recommendation lacks logic or fairness and looks like a decision made with bad faith intent, against the interest of Tamil Nadu, which is one of the largest producers of coconuts and coconut oil and many Southern states such as Kerala, AP and Karnataka. 

Further, he said, "How can you classify something which is clearly edible as effectively non-edible (based on the size of the container) for the sake of levying GST? How do you decide on 1000 milliliter (1 litre) as the cut-off for even considering whether something is intended for edible use? It is an arbitrary cut-off point, bereft of human compassion and basic logic."

He asked how many underprivileged families purchase coconut oil greater than one litre and the number of families using coconut oil to cook in the southern states. He also asked why the treatment is only for coconut oil and not other edible oils with multiple uses like mustard oil or gingelly oil. Hence, he opposed the proposal and said, the proposal is anti-poor and anti-southern states.