‘Complete Waiver of GST Demanded on Low Priced Biscuits’

‘Complete Waiver of GST Demanded on Low Priced Biscuits’

Biscuit Manufacturers Welfare Association (BMA) appealed the policymakers for a complete waiver of the proposed Goods and Services Tax (GST) on low priced biscuits which cost a maximum of Rs 100, per Kg.

Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

NEW DELHI: BMA president Haresh Doshi expressed his views with media that glucose biscuits retailed around Rs 70 per Kilogram were popular as they are affordable. “About 12 Lakh tons of Glucose biscuits are consumed annually by economically weaker section of our society as glucose biscuits are the cheapest source of energy. They even beat bread on per rupee calorific value and also the storing capacity,” he said.

An Akshayapatra meal gives 450 Kcal energy at a cost of over Rs10 per meal with the government subsidy at Rs 6.10 per meal. A 100-gram glucose biscuits currently retailed just over Rs.7 also offers 450 Kcal, without any subsidy but with an average VAT component of 12.5 per cent.” BMA vice president Mayank Shah said Biscuits in India are retailed from Rs 70/- Per Kilo up to Rs.700/- Per Kilo. Offerings by the biscuit Industry includes cakes, croissants, cream, cheese, chocolate, crackers, cookies, dry fruit, oat meal, rolls and wafers etc. which largely are consumed by the well to do. Thus, a flat singular rate of Goods & Services Tax (GST) on Biscuits may be grave injustice to the poor.

“Glucose, Marie & Milk biscuits retailed below Rs 100, per Kilogram, have been treated as Merit Goods. The Central government reduced Central Excise in 2003 to 8 per cent (earlier 16 per cent) and exempted completely from Excise Biscuits up to Rs100/ per Kg in 2007-08.

Thus the GST regime must necessarily identify and look at the two categories of Biscuits differently and continue to have Low Price Biscuits (LPB) in 0 per cent GST bracket” demanded Mr Doshi representing the 37,500 Crore Indian Biscuit Industry. BMA office bearers also have petitioned to Union Finance Minister Arun Jaitely to have Low Price Biscuits in 0 per cent GST bracket as a flat rate of GST on Biscuits will burden the poor while benefiting the rich. Glucose, Marie & Milk, the Low Price Biscuits (LPB) comprises 52 per cent of the 35 Lakh Tons biscuits sold annually in India. High Price Biscuits (HPB) including Cream, Cheese, Chocolate, Cookies, Dry Fruit & Oat Meal retailing above Rs100 to Rs 700 per Kilo, account for over 60 per cent of the total industry turnover. In the interest of Revenue Neutrality and to curtail loss to exchequer there is no case for them to be taxed on par with Low Price Biscuits.

“The Biscuit Industry contributes over Rs.3000 Crores to the exchequer and our demand for 0% GST on LPB in no way aims to compromise tax collections” stated Mr Doshi. Glucose Biscuits retailing at Rs.40/- per Kg in 1996, today after 20 years retail at just Rs.70 per Kg.

Even with upto 225 per cent surge in input costs, manufacturers curtail price of LPB in consumer interest as they fear losing this customer to the unorganized sector. LPB are the only hygienically produced snack retailing in packs priced at Rs 2 to Rs 5. The current net margins of about 3 per cent are easily washed out by a surge in Sugar, Wheat & Vegetable Oil prices. High Price Biscuits (HPB) have a much better capacity to absorb taxes and being in a growth phase may be able to bear a moderate rate of GST on all biscuits priced above Rs 100 per Kg.

Leave a Reply

Your email address will not be published. Required fields are marked *