--- title: "New GST on Edible Oil 2026: 5% Rate on Cooking Oil, Mustard Oil" description: "New GST rate on edible oil in 2026 is 5% on cooking oil, mustard oil, palm and sunflower oil. Let Busy handle GST billing accurately on every transaction." canonical: "https://busy.in/gst-rates/edible-oil/" author: "Nishant" published: "2025-07-21T07:48:30.000Z" category: "GST Rates" --- - The GST rate for most edible oils in India is set at 5%, making it consistent across different types like mustard, sunflower, and coconut oils. - Oils used for industrial or cosmetic purposes are taxed at a higher rate of 18% under the GST system. - HSN codes for edible oils range from 1507 to 1518, which helps in categorizing and applying the correct GST rate. - The unified GST rate of 5% replaced varying state VAT rates, bringing more transparency to the pricing of edible oils. - Businesses involved in the edible oil supply chain can claim Input Tax Credit (ITC) on costs like packaging and transportation, reducing their overall tax burden. # New GST on Edible Oil: Tax Rates & Supply Chain Effect Edible oil is a kitchen staple found in every Indian household. From mustard and sunflower oil to palm and refined oils, they are widely consumed across the country. But how does the [**GST**](https://busy.in/gst/) on edible oil affect the final price you pay at the store? In this blog, we’ll explore the applicable cooking oil [**HSN codes and gst rates**](https://busy.in/hsn/) , impact on pricing, and how the tax affects both manufacturers and retailers in the supply chain. ## **Is GST Applicable on Edible Oils?** Yes. Edible oils are taxable under GST in India. Common cooking oils such as soybean oil, groundnut oil, olive oil, palm oil, sunflower oil, coconut oil, mustard oil, and edible blended oils generally attract 5% GST under the applicable Chapter 15 headings. There is no compensation cess on these common edible oil entries. ## **New GST Rate on Edible Oils in India** For most edible oils, the GST rate remains 5%. The common edible oil headings under Chapter 15 generally remain in the 5% GST slab. So, for this category, the practical position is that the rate remains the same before and after 22 Sep 2025. ## GST Rate on Different Types of Edible Oils | Type of Oil | Common HSN Code | New GST Rate (After 22 Sep 2025) | Old GST Rate (Before 22 Sep 2025) | | --- | --- | --- | --- | | Soybean Oil | 1507 | 5% | 5% | | Groundnut Oil | 1508 | 5% | 5% | | Olive Oil | 1509 | 5% | 5% | | Palm Oil | 1511 | 5% | 5% | | Sunflower Oil | 1512 | 5% | 5% | | Coconut Oil | 1513 | 5% | 5% | | Mustard / Rape / Colza Oil | 1514 | 5% | 5% | | Other fixed vegetable oils | 1515 | 5% | 5% | | Vegetable fats and oils partly or wholly hydrogenated | 1516 | 5% | 5% | | Edible mixtures or preparations of vegetable fats or oils | 1517 | 5% | 5% | ## HSN Codes for Edible Oils Edible oils fall under HSN codes ranging from 1507 to 1518, depending on the source of the oil. | Oil Type | HSN Code | GST Rate | | --- | --- | --- | | Soybean Oil | 1507 | 5% | | Groundnut Oil | 1508 | 5% | | Olive Oil | 1509 | 5% | | Sunflower Oil | 1512 | 5% | | Palm Oil | 1511 | 5% | | Coconut Oil | 1513 | 5% | | Industrial Use Oils | 1516, 1517, etc. | 18% | Live Demo Available Today ## Scan Oil Product Barcodes at Billing — No Typing Required Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## **How to Calculate GST on Edible Oils** For most edible oils, GST is calculated at 5%. **The formula when the price is before GST** **GST Amount = Taxable Value × 5%** **Invoice Value = Taxable Value + GST Amount** **Example 1: Mustard Oil** Suppose the taxable value of mustard oil is Rs 2,000. **GST = 2,000 × 5% = Rs 100** **Final Invoice Value = Rs 2,100** **Example 2: Sunflower Oil** Suppose the taxable value of sunflower oil is Rs 5,000. **GST = 5,000 × 5% = Rs 250** **Final Invoice Value = Rs 5,250** **Formula when price is inclusive of GST** If the price already includes GST: **Taxable Value = GST Inclusive Price ÷ 1.05** **GST Amount = GST Inclusive Price - Taxable Value** **Example 3: Coconut Oil sold at inclusive price** Suppose coconut oil is sold for Rs 1,050, inclusive of GST. **Taxable Value = 1,050 ÷ 1.05 = Rs 1,000** **GST Amount = 1,050 -1000 = Rs 50** ## **Impact of GST on Cooking Oil Prices** GST helped standardise the tax structure across states for edible oils. However, the final retail price of cooking oil is still influenced by factors such as raw material cost, import dependence, transport, packaging, and processing. Businesses registered under GST can generally claim input tax credit on eligible inward supplies, which helps reduce tax cascading in the supply chain. ## Input Tax Credit (ITC) on Edible Oils Manufacturers, wholesalers, and retailers of edible oils can [**claim ITC**](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) on the GST paid for: - Packaging materials - Transportation services - Machinery and production equipment - Marketing and promotional expenses This helps businesses reduce tax liability, though ITC is not available if the oils are used for personal consumption or exempt supplies. ## **Conclusion** The GST on edible oil stands at a standard 5%, making it relatively affordable for end consumers while maintaining tax compliance for businesses. Whether you’re a manufacturer, distributor, or retailer, understanding the correct cooking oil GST rate, HSN codes, and [**ITC rules**](https://busy.in/gst/input-tax-credit/) ensures transparency and efficiency in the supply chain. With edible oils being essential products, accurate GST application is key to cost control and customer trust. ## About the author **Nishant** I am a Chartered Accountant with more than five years of experience in the accounting field. My areas of expertise include GST, income tax, and audits. I am passionate about sharing knowledge through blogs and articles, as I believe that learning is a lifelong journey. My goal is to provide valuable insights and simplify financial matters for individuals and business owners alike. ## Frequently asked questions ### What is the GST on edible oil in India? Most edible oils are taxed at 5% GST under HSN codes ranging from 1507 to 1518. ### What is the GST on cooking oil sold in bulk? Cooking oil, whether packaged or sold loose in bulk, generally attracts 5% GST. ### Can oil used in cosmetics or industrial use attract different GST? Yes, non-edible oils or those used for industrial purposes attract **18% GST**. ### What is the GST rate for olive oil and sunflower oil? Both are considered edible oils and attract **5% GST** when sold for human consumption. ### Can businesses claim ITC on edible oil purchases? Yes, if used for business purposes like resale or further processing. ## Related articles - [New GST on Skincare Products: Rate, Branding & Retail Pricing](https://busy.in/gst-rates/skincare-products/) - [New GST on Industrial Machinery: Slabs, ITC & MSME Effect](https://busy.in/gst-rates/industrial-machinery/) - [New GST on Restaurant Meals: Dine-in, Takeaway & Delivery Compared](https://busy.in/gst-rates/restaurant-meals/) - [New GST on Kitchen Utensils: What’s Taxed and What’s Not?](https://busy.in/gst-rates/kitchen-utensils/) - [New GST on Online Education: Rate, Exemptions & EdTech Impact](https://busy.in/gst-rates/online-education/) - [New GST on Packaging Materials: Tax Implication Across Industries](https://busy.in/gst-rates/packaging-materials/) - [New GST on Digital Marketing Services: Tax Rates & Input Credit Explained](https://busy.in/gst-rates/digital-marketing-services/) - [New GST on Pesticides: Rates, Agri-Exemptions & Sector Impact](https://busy.in/gst-rates/pesticides/) - [New GST on Butter: From Dairy to Dining – What You Pay](https://busy.in/gst-rates/butter/) - [GST on Honey: Rate, Applicability & Industry Outlook](https://busy.in/gst-rates/honey/)