Tamil Nadu Finance Minister Palanivel Thiaga Rajan has expressed his disagreement with the latest tax reforms announced by the GST council, with respect to coconut oil. The Tamil Nadu government has condemned the GST fitment council’s decision on raising the Goods and Service Tax on coconut oil and classifying it as edible/non-edible based on the quantity.
Terming the decision as ‘anti-poor and ‘anti-southern states’, the minister filed his disagreement in a written response as he was unable to attend the meeting of the GST council held on Friday.
On Friday, The GST fitment council recommended levying 18% Goods & Service Tax on the containers carrying less than 1000ml/ 1l of the coconut oil, classifying it as a non-edible commodity and for the containers carrying more than 1L, 5% GST will be levied, classifying it as an edible commodity, the committee proposed. The state finance minister made a written submission to oppose the move and quipped that it is ‘illogical’ to classify a product as eatable or not based on the quantity, just to label extra tax.
"We find this recommendation lacking in either logic or fairness. We will go so far as to consider this decision to have been made with bad faith intent against the interest of Tamil Nadu," he said in the written response. The state finance minister has argued that the decision taken by the finance ministry is ‘arbitrary’ and doesn’t go well with the coconut-producing southern states including Tamil Nadu, Kerala, Karnataka, Andhra Pradesh, etc.
PTR rebuffed the recommendations and said that the move was against Tamil Nadu, which is the largest producer of coconuts and coconut oil in the country. Rajan asked, “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?... It is an arbitrary cut-off point, bereft of human compassion and basic logic.”
Stressing on his argument, he also posed questions of discrimination against the south Indian states and the oil, he asked why coconut oil was singled out among other edible oils with multi-purposes, he cited the example of mustard oil & gingelly oil. “What about imported oils such as palm oil or olive oil, which the Centre in its wisdom has chosen to exempt from Import Duties?” he wrote.
Finance Minister Nirmala Sitharaman on Friday announced that petrol and diesel will not be brought under the ambit of the GST regime just yet. Explaining the decision of not including the fuel in the GST, as had been claimed, Nirmala Sitharaman stated that subsuming the current excise duty and VAT into one national rate would impact revenues.
(With PTI Inputs)