Biscuit manufacturers have sought zero tax on low price biscuits under the proposed Goods and Services Tax (GST). The manufacturers have said that low price biscuits category biscuits are items of mass consumption and higher taxes will have an adverse impact on production as well as demand.
“A flat 12 per cent GST on biscuits will be a grave injustice to the poor as glucose, marie and milk biscuits retailed below INR 100 per kg are treated as merit goods and largely consumed by the poor,” said Haresh Doshi, president, Biscuit Manufacturers Welfare Association.
He said that central government had reduced central excise in 2003 to eight per cent from earlier 16 per cent and exempted excise on biscuits up to INR 100 per kg in 2007-2008.
Manoj Sharda, managing director, Ajmer Food Products, said that low price category biscuits comprise 52 per cent of the 35 lakh tonnes biscuits sold annually in the country. High price biscuits (HPB) retailing from INR 100 per kg to INR 700 per kg account for 60 per cent of the total sales value of INR 36,000 crore.
Members of the association said that glucose biscuits retailing at INR 40 per kg in 1996, today after 20 years retail at just INR 70 per kg. Even with a 225 per cent surge in input costs, manufacturers curtail price of LPB in consumer interest as they fear losing this demand to the unorganised sector.
They also said that the realisation for HPB is better and the industry has no hesitation in paying GST at a rate deemed fit by the government on all biscuits priced above INR 100 per kg.