Biscuits are a food item that consumed by people of all age groups hence it is a mass consumption food product and similar products that are subject to lower tax rate. Biscuit manufacturers demanded a lower GST rate on biscuit and related products than the current 18 per cent. Stating that about 15 per cent sales have gone down post-GST implementation, Indian Biscuits Manufacturers Association (IBMA) said biscuit consumers belong predominantly to the poorer segment and will impact the 2.5 crore employment created by this industry.
The association pushing for a lower GST rate on biscuits between 5 per cent and 12 per cent stating that it is not a premium product and higher tax will lead to stagnation in growth of the industry. IBMA President B P Agarwal said “This is a labour oriented industry and mostly local workers get employment. Besides, other food products such as processed dry fruits, sweets, tea and juice have been kept at a 5 per cent bracket. Close to 2.5 crore direct and indirect employment is created by this industry which include small workers, distributors and transporters.”
The GST Council kept biscuits at 18 per cent tax slab under the Goods and Services Tax, which was rolled out from July 1 last year. GST has subsumed all major levies including excise, service tax and VAT, unifying 16 different taxes, and makes India a single market.
Agarwal said the association has written to all the finance ministers and also to Prime Minister to place biscuits between 5-12 per cent slab. What if the government denies lowering the tax on biscuits, Agarwal said the cost will automatically go up and will be passed to consumers. “If today we sell 50 gm packet at Rs 5, we will sell only 30 gm or less than that,” he added.