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Beer makers in the country have asked the Centre to include alcohol in the GST which will lead to transparency in the industry.
Investment impact Chris White, Chairman of All India Brewers’ Association (AIBA) told BusinessLine that alcoholic beverages should be taxed on absolute alcohol content in the product.
He also said that if alcohol is excluded from GST, the entire industry could get impacted negatively in terms of investments.
“Beer is a high investment and low margins business — if there are no set-offs for the manufacturers on their investments and on raw materials for production, profitability will take a hit,” White said.
Beer, he pointed out, had alcohol content of between 5 per cent and 8 per cent which was lower than wine which is 12 per cent and IMFL which is at 42.5 per cent.
White said beer contributes as much as ₹15,000 crore to the States’ exchequer and hence including it in the GST will lead to transparency as well as better realisation for both the States as well as manufacturers.
Control issue While, who is also President and group CEO of multinational beer major AbInBev, India — the makers of Budweiser — said companies have little or no control over distribution system which means there is limited pricing flexibility leading to low margins for the manufacturers.
“The growth in the industry is sluggish because of high taxation which is forcing consumers to shift to IMFL,” White said.
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