Food or cosmetic? SC to answer query over tiny coconut oil packs

A tiny bottle of coconut A oil-would you use it to cook up a meal, or to nourish your hair?

- Krishna Yadav

The seemingly trivial question is close to being answered, after winding through a tax tribunal, a government department, and India's top court for over 15 years. At stake: Heavy taxes and higher prices if the product is labelled a kitchen ingredient, and potential impact on other dual-use products.

On 17 October, the Supreme Court reserved its order on whether coconut oil sold in packs up to 200ml should be taxed as edible oil or a hair care product. While edible oil attracts a goods and services tax (GST) of 5%, it is 18% for hair care products.

A decision favouring such packs as hair care products could prompt manufacturers to raise prices, said Prateek Bansal, a partner at White & Brief Advocates & Solicitors. He said this might impact affordability of smaller packs, and prompt manufacturers to adjust marketing strategies.