|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
Biscuit makers’ body urges GST Council to keep biscuits in lowest slab
|
|
Saturday, 18 February, 2017, 08 : 00 AM [IST]
|
|
Our Bureau, New Delhi
|
Federation of Biscuit Manufacturers of India (FBMI) has urged the Goods and Service Tax (GST) Council to keep biscuits in its lowest slab, since they are an item of mass consumption, and higher taxation on them would adversely hit their production and consumption, and hence, employment in the industry.
The body, an affiliate association of PHD Chamber of Commerce and Industry,was of the view that lower GST rates on biscuits will enable their availability and access within the reach of the aam aadmi, and that too at affordable prices.
In a representationsent to GST Council by FBMI,it was emphasised that biscuits be taxed within the lowest slab of GST for foods.
It was pointed out that almost 93 per cent of the food basket comprises basic food.The government proposes to tax basic food at a lower rate under GST.
Taxing the remaining seven per cent food items at higher rates under GST will lead to increase in complexity, without substantial addition to the revenues.It will also not meet the goals of efficiency and equity.
Tax rates should apply uniformly across the entire supply chain, from one endto another, so as to encourage value-added activities in the farm produce and food sector.
GST provides the right opportunity to correct the current anomalies.Under GST, there should be no discrimination while taxing food products on the basis of their being branded or unbranded, or premium or non-premium products, as this will encourage value addition across the chain from farm to plate.
FBMIalso emphasised that multiple rates within a sector would lead to classification disputes and complex record-keeping and compliance system.
There is a predominance of small and medium enterprises (SMEs) at the retail level and they will be ill-equipped to handle multiple rates.Thus, in the interest of simplicity, all food items, including biscuits, should be taxed at a uniform, low rate.
A higher rate of tax would impact demand in the entire value chain. It will cut down on procurement of raw materials by biscuit manufacturers that would adversely impact farmers across India.Lower demand will also negatively impact investments, exports and employment in the food industry.
Lower and uniform GST rate on biscuits will also help India to be in line with international best practices, wherein countries such as New Zealand, Singapore, Denmark and Japan, have a single lower value-added tax (VAT) rate for all goods including biscuits, though biscuits are treated as a non-taxable basic grocery in countries such as Canada and the United Kingdom.
|
|
|
|
|
|
|
|
|
|