Coconut oil manufacturers and the farming community have raised apprehension over the reported move to hike GST rates for copra, coconut oil and cake from the current five per cent. They fear that any hike would be detrimental to the industry in Kerala, thereby impacting dealers, manufacturers, etc.
Sibi Thomas, President of Cochin Oil Merchants Association (COMA), has requested the Centre and GST Council to exempt copra, coconut oil and oil cake from the levy of tax under the GST Act. COMA has also sought a reduction in the rates from five to three per cent considering the prime fact that coconut oil is the most essential commodity consumed in Kerala.
It is pointed out that the present rate of tax applicable to coconut oil, copra and oil cake is five per cent under the GST which comprises 2.5 per cent and 2.5 per cent SGST. It has been the repeated request of dealers and the farming community to exempt these items from the GST net . The exemption is necessary to protect coconut farming and the oil industry which has been facing severe setbacks on account of various factors in the recent period.
The association is planning to submit a memorandum in this regard to the Karshaka Morcha scheduled to be held next week in Kochi by the ruling BJP. COMA has already sent requests to the GST Council to desist from any move to hike the rates on copra and coconut oil, office bearers said.
Prices stay flat
Meanwhile, the coconut oil market remained steady with prices ruling at ₹149 per kg in Kerala and ₹131 in Tamil Nadu, while copra prices were at ₹91 and ₹88, respectively. Traders cited a subdued demand for the prices to remain flat for the past one week.
Thalath Mahmood, Director, COMA, cited surplus production in major producing centres for the prices to remain flat and is likely to move further south. The absence of a strong corporate demand and bulk procurement made by companies when rates are ruling lower may be the reason for a subdued demand.
Moreover, he said coconut oil could not take the advantage of the price surge for other edible oils (such as sunflower and palm oil on account of the Russia-Ukraine conflict) because of higher inflows due to a production glut.
Ubais Ali, CEO of Mezhukkattil Mills, said abundant supply due to a good crop season has impacted coconut oil prices. This coupled with lower purchasing power of people hit the demand, which is expected to continue further. A reverse migration to coconut oil happens only when the prices further declines, he added.