Biscuit industry demands GST to be reduced to 12 percent

Biscuit industry demands GST to be reduced to 12 percent

New Delhi. IMBA, a conglomerate of biscuits, has asked the government to reduce the rate of Goods and Services Tax (GST) to 12 percent from the current 18 percent. The organization says that the high GST coupled with the rising cost of raw materials like maida is affecting the financials of companies. The organization made this demand ahead of the GST Council meeting on Friday. The council is to meet in Goa.

KP Mohan Das, general secretary of the Indian Biscuits Manufacturers Association (IMBA), said in a phone conversation with 'Bhasha', "The biscuit industry is currently in crisis due to the steady decline in margins. The reason for this decline is to impose GST at it's a higher rate of 18 percent and an increase in the price of raw materials like maida, sugar, edible oil, milk, etc.” According to the organization, the price of flour has increased by 25 percent in August itself.

The price of edible oil has also increased. He said that the growth rate of the biscuit industry was 15 to 17 percent before GST, which came down to 5.6 percent in the last financial year. GST came into force in July 2017. Comparing it to other food items, he said, "GST is 5 percent on items like sweets, dry fruits, and tea."

GST on products like juices, namkeen, jam, pasta is also 12 percent but imposing GST on biscuits at 18 percent is unthinkable, ”said Mohan Das, seeking to reduce the GST rate from 18 percent to 12 percent. The biscuit industry is a labor-intensive industry and employs about 7 million people. The situation has deteriorated due to margins being affected and if the situation does not improve, layoffs may have to be made. The biscuits industry has a market of around Rs 40,000 crore.