Manufacturers seek zero GST on low price biscuits

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 Biscuit manufacturers have sought ‘nil’ tax on low price biscuits under the proposed Goods and Services Tax (GST). The manufacturers here said that low price biscuits category biscuits are items of mass consumption and higher taxes will have an adverse impact on production as well as demand of this food item.

 “A flat 12 percent Goods and Services Tax (GST) on biscuits will be a grave injustice to the poor as glucose, marie and milk biscuits retailed below Rs 100 per kg are treated as merit goods and largely consumed by the poor,” Biscuit Manufacturers Welfare Association president Haresh Doshi told PTI today.

 He said that central government had reduced central excise in 2003 to 8 percent from earlier 16 percent and exempted excise on biscuits up to Rs 100 per kg in 2007-08. Ajmer Food Products managing director Manoj Sharda said that low price category biscuits comprise 52 percent of the 35 lakh tonnes biscuits sold annually in the country. High price biscuits (HPB) retailing from Rs 100 per kg to Rs 700 per kg account for 60 percent of the total sales value of Rs 36,000 crore.

 Members of the association said glucose biscuits retailing at Rs 40 per kg in 1996, today after 20 years retail at just Rs 70 per Kg. Even with a 225 percent surge in input costs, manufacturers curtail price of LPB in consumer interest as they fear losing this demand to the unorganised sector.

They also said that the realisation for HPB category biscuits is much better and the industry has no hesitation in paying GST at a rate deemed fit by the government on all biscuits priced above Rs 100 per kg.

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