India’s GST Dilemma: Why Ghee Faces Higher Tax Than Refined Oils

India’s GST structure has placed ghee at a disadvantage, imposing a 12% tax, while refined vegetable oils like soybean, sunflower, and palm oil attract a lower 5% GST rate. This disparity has sparked concerns among nutritionists and dairy industry stakeholders, who argue that ghee’s health benefits should be recognized in tax policies.

 

Ghee, rich in fat-soluble vitamins A, D, E, and K, is free from trans fats and contains butyric acid, known for its anti-inflammatory properties. In contrast, many refined oils undergo extensive processing, stripping them of natural nutrients and introducing additives.

 

The Indian Dairy Association (IDA) has urged the government to reduce GST on ghee, citing its Ayurvedic significance and role in traditional diets. Higher taxation raises production costs, pushing consumers toward cheaper, less nutritious alternatives. Stakeholders have approached the Finance Ministry and Agriculture Ministry, advocating for equitable taxation.

 

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Source: The Hindu Business Line | Times of India | Hindustan Times