Biscuit makers seek exemption under GST

The inclusion of low-priced glucose and other biscuits under the proposed Goods and Services Tax (GST) regime will lead to shutting down of about 240 biscuit factories, warn manufacturers.
They have sought exemption under the GST saying these low-prices biscuits under Rs 100 per kilogram are low margin products and are currently exempted from the central excise duty.
"A proposed flat 12 per cent GST on biscuits will be a grave injustice to the poor as biscuits retailed below Rs 100 per kg are treated as merit goods. If these products are included then about 240 biscuit factories will shut down," Mayank Shah, vice president, Biscuit Manufacturers Welfare Association, told PTI.

Shah, who is also deputy marketing manager at Parle Products, said low-cost biscuits which at present account for 40 per cent of total sales may fall down to 20-25 per cent if they are taxed under GST.
Biscuit manufacturers, however, are in consensus that the government can levy high tax of even up to 18 per cent on higher priced biscuits.
Biscuits in India are priced in the range of Rs 70 to Rs 700 per kilo gram.
"Despite 225 per cent surge in input costs, glucose biscuit price has not gone up significantly. Glucose biscuit was retailed at Rs 40 per kg in 1996. Today after 20 years, retail price is just Rs 70 per Kg. Biscuit manufactures make only 2-3 per cent profit on below Rs 100 per kg biscuits," Biscuit Manufacturers Welfare Association president Haresh Doshi said.

As per Biscuit Manufacturers Welfare Association, biscuits industry at present in India in estimated at Rs 37,500 crore.