Biscuit manufacturers call for lower GST rate

New Delhi: Biscuit manufacturers on Tuesday demanded a lower GST rate on biscuit and related products than the current 18 percent, saying it is a mass consumption food product and similar products are subject to lower tax rate.

Stating that about 15 percent sales have gone down post GST implementation, Indian Biscuits Manufacturers Association (IBMA) said consumers of biscuit belong predominantly to the poorer segment and will hurt the 2.5 crore employment created by the industry.

The association called for bringing down GST rate on biscuits between 5 percent and 12 percent saying it is not a premium product and higher tax will lead to stagnation in growth of the industry.

"This is a labour oriented industry and mostly local workers get employment. Besides, other food products such as processed dry fruits, sweets, tea and juice have been kept at a 5 percent bracket," IBMA President B P Agarwal told reporters here.

The GST Council kept biscuits at 18 percent tax slab under the Goods and Services Tax, which was rolled out from July 1 last year.

Agarwal said the association has written to all the finance ministers and also to the prime minister to place biscuits between 5-12 percent slab.

"Close to 2.5 crore direct and indirect employment is created by this industry which include small workers, distributors and transporters," he added.

When asked if the government denies lowering the tax on biscuits, Agarwal said the cost will automatically go up and will be passed to consumers.

"If today we sell 50 gm packet at Rs 5, we will sell only 30 gm or less than that," he added.

GST has subsumed all major levies including excise, service tax and VAT, unifying 16 different taxes, and make India a single market.