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The SC ruling clarifies a long-standing ambiguity on whether coconut oil sold in small packages (typically below 200 ml or 500 ml) should be categorised as edible oil or cosmetic oil.
The SC ruling has settled a 15-year-old dispute on coconut oil classification.
The Supreme Court has ruled that coconut oil in small packages can be classified as edible oil, thus settling a 15-year-old dispute, according to a CNBC-TV18 report.
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What Does It Mean?
The ruling clarifies a long-standing ambiguity on whether coconut oil sold in small packages (typically below 200 ml or 500 ml) should be categorised as edible oil or cosmetic oil.
Edible oils typically attract lower GST or VAT rates compared to non-edible oils, which may be taxed as cosmetics or industrial products. This decision might lead to lower taxes on small-package coconut oil, benefiting manufacturers and consumers.
Coconut oil producers, especially in Kerala and Tamil Nadu (major coconut-producing states), have faced legal and financial challenges due to different state interpretations of the product’s classification. A uniform classification means simpler compliance, possibly reducing disputes with tax authorities.
(The story will be updated)
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