The Hindu Business Line : Biscuit cos to pass on excise duty benefits to consumers

Crisp plans
Cos to increase biscuit pack volumes by up to six per cent under glucose, Marie and milk categories.
Plea to remove excise duty on biscuits completely and not put a price limit.

New Delhi March 16 Biscuit companies plan to pass on excise duty benefits to consumers by increasing existing pack volumes, while maintaining current price levels. The Biscuit Manufacturer's Welfare Association (BMA), has announced the decision following the Union Finance Minister, Mr P. Chidamabram's 2007-08 Budget announcement to exempt biscuits selling at Rs 50 per kg in the retail market from excise duty.

According to industry estimates, companies will increase volumes in the biscuit packs by up to six per cent under the glucose, Marie and milk categories, the main beneficiaries from excise duty exemptions, since they sell below Rs 50 per kg.

BMA estimates the total value of excise exemption to be around Rs 180 crore in the 12 lakh tonnes (Rs 6,000 crore approximately) organised branded biscuit market.

Meanwhile, the Rs 9,500-crore total domestic biscuit industry, including the unorganised sector, growing at 12-15 per cent annually, urged Mr Chidambaram to enlarge the guidelines for excise exemption by withdrawing the price limits.

Manufacturers' plea

"We request the Finance Minister to remove excise duty on biscuits completely and not put a price limit," said Ms Maria Iyer, President, BMA. After the excise duty exemptions, biscuit brands selling over Rs 50 per kg will continue to pay a duty of 8 per cent that was reduced from 16 per cent in 2003, she added.

As far as respective companies are concerned, Parle has already decided to introduce its enlarged 99-gram pack of the glucose brand Parle G in the market that was currently being sold only in Tamil Nadu, due to decrease in VAT limits to 4 per cent from 12.5 per cent.

Britannia, on the other hand, is still evaluating possibilities of passing on the benefit to the consumers and is expected to come up with a decision in the next two-three months.

More Stories on : Food & Dairy Products | Excise and Customs | Budget

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