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With the crucial GST Council Meeting slated for later this week, the industry is pinning its hopes on a reduction in GST on biscuits priced at Rs 100 per kg or below. Currently, the entire biscuits category -- whether priced below Rs 100 per kg or above Rs 100 per kg -- attracts 18 per cent GST rate.
The Biscuits Manufacturers’ Welfare Association (BMA), with more than 40 key industry players as its members, has urged the government to reduce GST on biscuits that are priced at Rs 100 per kg or below to 5 per cent, as they are consumed by the masses and lower socio-economic groups.
Mayank Shah, Vice-President, Biscuits Manufacturers’ Welfare Association said, “The industry is not looking at a blanket reduction of GST across all categories. We understand the revenue compulsions of the Central Government. Hence, we are only asking for a rightful reduction in GST from 18 per cent to 5 per cent for biscuits that are priced at Rs 100 per kg or below, which are consumed by the masses, who are extremely price-sensitive.”
Shah is also the Senior Category Head at Parle Products.
He added that biscuits that are priced above Rs 100 per kg are premium, and are targeted at higher socio-economic consumer segments. According to industry estimates, lower priced biscuits which are targeted at the masses contribute about 25 per cent in terms of value to the biscuits industry, which is estimated at about Rs 37,000 crore.
Shah said sectors such as footwear and apparel are also subjected to dual GST rates and a similar dual rate structure can also be implemented for the biscuits category. The biscuits industry has been pushing for lowering GST on biscuits priced at Rs 100 or below per kg for the past two years.
“Biscuits is one of the few varieties of processed food which has such a high penetration and is even consumed by the marginal classes and lower socio-economic consumers. Any price hike in biscuits priced below Rs 100 per kg pushes such consumers to consuming loose variety of biscuits made by the unorganised sector, which are not safe and hygienic. This is also a revenue loss for the organised sector as well as the exchequer,” Shah added.
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