GST relief for biscuit makers on cards: Panel may assess demand to cut tax rate

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Updated: September 9, 2019 10:48:37 AM

GST fitment committee will assess the long-standing demand of biscuit makers’ to provide GST relief on biscuits and the same is likely to be addressed in the upcoming GST Council Meet on 20 September.

biscuits, parle, parle g, britannia, air india, capital, slowdown, economy news, wages, gstBritannia and Parle, two of the leading biscuit makers, recently sounded alarm bells over the sharp deceleration in its domestic sales volumes. (Representational Image)

GST fitment committee will assess the long-standing demand of biscuit makers’ to provide GST relief on biscuits and the same is likely to be addressed in the upcoming GST Council Meet on 20 September, CNBC TV-18 reported on Monday. However, the committee is not in favour of GST rate cuts and has rejected the demand in the past, the news channel added. While several industry leaders have been requesting the government for reducing rate on biscuits for about two years now, Parle Products, the company famous for Parle-G biscuits had recently brought the issue to the limelight and stated that the company may have to lay off several thousands of employees if the industry’s demand is not meted out.

Explaining pre GST tax rates, Mayank Shah, category head at Parle had recently said that the biscuit sales have dipped about 7-8% and the industry is witnessing double whammy of high GST and FMCG slowdown. He said that before GST, biscuits which were sold at Rs 100 per kg and below, were exempt from excise duty and sales tax was levied. However, the government later clubbed biscuits which are premium in nature with the standard biscuit and subjected them to 18% GST. “It is not fair and is unjust to the middle and lower-income group. There is no processed food available in the market that is Rs 100 and below per kg in India. If you tax the common man’s food at 18% GST, it is not right,” Mayank Shah had told Financial Express Online last month.

Further, Parle had then also said that it may also consider another price hike soon because of skyrocketing raw material prices. Prior to Parle, Britannia’s managing director Varun Berry had also said that there is a slowdown in the segment and people are not buying even Rs 5 price products. 

Days after Parle Products said that it may have to lay off employees, Finance Minister Nirmala Sitharaman had said that she would like to hear from State Finance Ministers if they sensed that branded companies are shutting down because of GST, she said at a press conference, late in August.

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