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Domestic companies in the food processing sector are likely to remain unaffected by the abatement of 35 per cent on the retail sale price in the assessment of central excise duty on beverages such as iced tea and lemonade.
Piruz Khambatta, Chairman, CII National Committee on Food Processing and CMD, Rasna, said, “This abatement is simply an average amount of the local taxes and margins and will have no impact on domestic beverage companies but it might impact the MNCs who are making synthetic drinks.
“Overall there will be no impact on the beverage category as there has been no change in the excise structure and the main concern for FMCG players is more on the service tax which has been increased from 12 to 15 per cent which will increase our costs.’’
Bisleri International, which has recently entered the energy drink category, is also not expecting any significant gains from the Budget.
Ramesh Chauhan, Chairman, Bisleri International, said, “The abatement of 35 per cent does no make any sense to the beverage category as there is no change excise duties. There is no point of giving abatement when the government has not tinkered with excise duties for the FMCG category.’’
In fact, increase in service tax is the main concern for most players in the FMCG category.
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