The Confederation of All India Traders (CAIT) is demanding a lowering of the GST rate on beverages from 28 per cent, which comes to 40 per cent after the inclusion of cess, arguing that it blocks the working capital of small retailers.
CAIT admonished the union finance minister to ponder reducing the GST rate on beverages and suggested that India should move to a sugar-based tax (SBT) system, keeping the tax slabs proportional to the sugar in products, which means the higher the sugar in products, the higher the tax.
CAIT stated that for beverages in the low and no sugar category, this would reduce taxes, opening up capital for the retailers to make more purchases, increase sales, and double their incomes. This also benefits the common man significantly by reducing household costs at the same time.
The traders’ body said it will launch a campaign among stakeholders and citizens to forge an alliance with other verticals of the economy like farmers, transporters, SMEs, women entrepreneurs, consumers, hawkers, etc. to impress upon both the Centre and state governments to lower the tax rate on beverages.
The Goods and Services Tax (GST) Council, in its meeting held on September 17, 2021, recommended that “carbonated fruit beverages of fruit drink” and “carbonated beverages with fruit juice” would attract a GST rate of 28 per cent and a cess of 12 per cent. This is being prescribed specifically in the GST rate schedule.