In the name of Allāh, Most Gracious, Most Merciful

Assalāmu ῾alaykum wa Rahmatullāhi Wabarakātuh
There has been alot of confusion regarding Shellac especially during the past decade. Various fatwa’s and opinions have been issued with regards to the permissibility of this ingredient.
According the Islamic Fiqh insects, in principle, are not impure as they do not have flowing blood. However, insects (or any part of it) are impermissible to consume due the fact that they are from the ‘khabā’ith’ (filth).
Products which contain ingredients derived from insects are permissible for external use only.
Shellac is a secretion derived from a female lac bug. This secretion will be halal based on the analogy of secretion derived from the bee, i.e. honey. However, during the process of manufacturing it into a glazing agent for an edible product, there are possibilities of traces and particles of this bug to be found in the product itself.
Therefore, edible products containing shellac will be unlawful for consumption.
SANHA has also announced that the Shellac ingredient used in confectionery, bakery and pharmaceutical products amongst others, has been declared HALAL, retracting their previous view of its impermissibility. They came to this conclusion after researching, consulting with various Muftīs on the issue of Shellac for almost four years and exhausted every possible angle on this issue. The Muftīs are unanimous that Shellac is permitted for consumption.
We understand that a recent Fatwa issued by Darul Uloom Karachi and endorsed by the internationally renowned scholar, Mufti M. Taqi Usmani Saheb (DB), shellac is Halal and hence it can be assumed that it is permissible according to Ahnaafs.
Muslim consumers may enjoy Halal suitable products containing Shellac. However, please do understand that there is still some disagreement from other scholars and as we don’t have information about the other madhabs thus it is upto the individual to decide.
Please note: Glazing with Shellac is not Halal if alcohol is used to dissolve the Shellac and then evaporate before glazing on food products. Pure Shellac without alcohol is Halal because it is a insect secretion.
And Allah Subhanahu Watala knows Best
Wa Alaykumussalaam Wa Rahmatullahi Wa Barakatuh