Biscuit industry stagnating; Urgent need to lower GST rate to 12 from 18 per cent

9 March, 2018

 

Biscuit manufacturers, especially in the SME sector, have been hit very hard because of unjustified imposition of Goods & Services Tax (GST) at 18 per cent This has slowed the growth in the industry and there is an urgent need to bring down GST rate to 12 per cent.

Biscuit is made of agricultural products like wheat, vegetable oil, sugar and milk and higher production of biscuit would benefit larger number of farmers. Biscuit is highly Labour intensive, and stagnation in growth in production would adversely affect the industry which is estimated to provide employment to about 7.5 lakh workforces directly and more than 30 lakh persons indirectly in marketing, retail network, transport etc.

Additionally it is also a mass consumption food product, hygienically processed and consumers of biscuit belong predominantly to the poorer. Biscuits are common product of consumption from a rickshaw puller to a low-wage laborer in search of hygiene, energy, nutrition at a low cost.

So why is this industry being targeted when similar food products are subject to LOWER GST RATES, such as Sweets (5%), Processed Dry fruits (5%), Tea(5%), Juice, Namkeen, Jam/Jelly, Noodles, Pasta, Tomato Ketch-up (all 12%) while GST at 18% is imposed on Biscuit.

Indian Biscuits Manufacturers’ Association (IBMA) has urged the government to review their decision of imposing 18per cent GST on Biscuit industry and bring down the GST rate to 12% to avoid stagnation in growth of the industry.

IBMA has already submitted detailed representation to Prime Minister Mr. Narendra Modi, Union Finance Minister Mr. Arun Jaitley, and Union Minister for Food Processing Industries, Harsimrat Kaur Badal and also to Finance Ministers of all states, who are members of the GST Council.
IBMA delegation has also met Suresh Prabhu, Commerce and Industry Minister and Dr Bijaya Kumar Behera, Economic Adviser, Ministry of Food Processing Industries. More meetings with Members of Parliament and other officials of various ministries are being organized. IBMA has also sought intervention and support from Members of Parliament from various political parties for favorable consideration of levy of GST at lower slab of 12 per cent.

 

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