Tax relief for cos: SC says small coconut oil packs are edible oil

The Supreme Court (SC) on Wednesday ruled that coconut oil in small bottles of up to 200ml should be classified as edible oil for taxation purposes, resolving a 15-year-long legal dispute between the excise department and manufacturers.

- Krishna Yadav

However, the court clarified that if coconut oil is packaged in small bottles and labelled for use on hair, it should be classified as hair oil under the Central Excise Tariff Act, 1985.

Currently, under the goods and services tax regime, edible oil is taxed at 5%, while hair oil attracts an 18% levy.

This decision came as a relief to both manufacturers and consumers, preventing potential price hikes and maintaining access to essential products like edible coconut oil.