Still hopeful of govt lowering 18% tax on biscuits costing less than Rs 100 a kg: Mayank Shah, Parle Products

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We all know that there is a slowdown in the economy and like many other sectors we have also been affected. We are further affected by a high rate of GST. Biscuits below Rs 100 per kg are being subjected to higher GST. Since the implementation of GST and since the time that biscuits were put in 18% GST slab, we have been talking about it to the government. Biscuits below Rs 100 per kg were actually exempted from excise in the earlier tax regime. The principal of allocating a particular GST slab was of a revenue-neutral rate and by that logic, it should not be subjected to 18% GST and clubbed with other premium biscuits which are at Rs 200, Rs 300 and Rs 400 per kg. These are the biscuits consumed by the middle class and the lower-middle-class consumers and they are available at Rs 100 per kg and below. Today, there is no processed food in India that is available at Rs 100 per kg and below.

In fact, adjacent categories like rusk which sell along with biscuit are consumed along with biscuit or in place of biscuit, are all subject to 5% GST rate even though the MRP is much higher. Rusk is typically sold at Rs 150 per kg whereas biscuits of costing Rs 100 per kg and below are subjected to 18% taxation. We have been requesting government since the implementation of GST to look at the biscuits category. We were very hopeful and very optimistic about the government reducing GST rate and we waited for more than one and a half years, but that did not happen and we were forced to take a price hike. But these are very price-sensitive categories and as a result of the price hike, there was a dip in demand which was aggravated by the slowdown in the economy. In the price-sensitive category, it is not just Parle, you would have heard it from other companies as well that consumers think twice before buying a Rs 5 packet of either glucose or Marie or milk or something like that. These are typically categories which are sold at Rs 100 per kg and below.

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