Coconut oil price likely to skyrocket as GST for small quantity packets may go up
Kochi: The merchants have informed that the move to increase GST for packed coconut oil from 5 percent to 18 percent cannot be accepted as it will lead to price hike. Also the soaring price can pave the way for substandard products.
There are plans to increase the GST of coconut oil packets which is less than 1 litre from 5 percent to 18 percent. In Kerala, smaller quantities, including packets of half litre, have higher demand among customers. When GST is hiked, they will have to pay huge price.
The low quality coconut oil brought from Tamil Nadu, Karnataka and Andhra Pradesh is widely sold in Kerala. As this oil is produced from third degree copra, it is available for low rate and the customers will be compelled to buy the same.
More quantity of copra is brought from other states and this is affecting the coconut oil market. The merchants alleged that India could be the only country that imposes tax on farm products. The edible coconut oil in packets of 1 litre and above will continue to have only 5 percent as GST.
Coconut oil, sold in loose packets, would not be affected with the GST. Also the small quantities of those products listed as cosmetic items are unlikely to come under the GST category.
Raju Tharani, president of Cochin Oil Merchants Association, said that move to increase GST of coconut oil is a blow for the merchants. Meanwhile, the authorities have reduced the GST for vegetable oils but put the burden on coconut oil traders. This cannot be accepted, he added.