Urgent Need to Lower GST Rate on Biscuit To 12%: IBMA

  • Since the imposition of 18 % GST, the growth of the industry has started to stagnate
  • Biscuits are common product of consumption from a rickshaw puller to a low-wage laborer in search of hygiene, energy, nutrition at a low cost
  • Biscuit is made of agricultural products like wheat, vegetable oil, sugar and milk and higher production of biscuit would benefit larger number of farmers

Biscuit manufacturers, especially in the SME sector, are hard hit because of unjustified imposition of Goods & Services Tax (GST) at a very high rate of 18%. The growth in the industry has started to stagnate since the imposition of the 18% GST and there is urgent need to bring down GST rate to 12%. Biscuit is a mass consumption food product, hygienically processed and consumers of biscuit belong predominantly to the poorer segment but biscuits have been mistakenly understood to be a premium product, preferred for the consumption by the affluent society, whereas biscuit has been placed in the higher tax slab denying level playing field for biscuits vis-à-vis similar products.

“Biscuits are common product of consumption from a rickshaw puller to a low-wage laborer in search of hygiene, energy, nutrition at a low cost. Similar food products are subject to LOWER GST RATES, such asSweets (5%), Processed Dry fruits (5%), Tea(5%), Juice, Namkeen, Jam/Jelly, Noodles, Pasta, Tomato  Ketch-up (all 12%) while  GST at 18% is imposed on Biscuit. We urge the government to review their decision of imposing 18 % GST on Biscuit industry. There is urgent need to bring down the GST rate to 12% to avoid stagnation in growth of the industry”, said Mr. B P Agarwal, President, Indian Biscuits Manufacturers’ Association (IBMA).   

Mr. Anoop Bector, MD of Cremica Biscuits added that “Biscuit is made of agricultural products like wheat, vegetable oil, sugar and milk and higher production of biscuit would benefit larger number of farmers. Biscuit is highly Labour intensive, and stagnation in growth in production would adversely affect the industry which is estimated to provide employment to about 7.5 lakh workforces directly and more than 30 lakh persons indirectly in marketing, retail network, transport etc”.

“Biscuit industry is subjected to escalation in cost of inputs/ingredients due to higher cost of transportation, fuel, packaging, wages etc.”added Mr. Pankaj Agarwal, CEO of Bonn Biscuits.

IBMA has already submitted detailed representation to the Hon’ble Prime Minister Mr. Narendra Modi, Union Finance Minister Mr. Arun Jaitley, Union Minister for Food Processing Industries Miss Harsimran Kaur Badal and also to the Finance Ministers of all states, who are members of the GST Council. IBMA has also sought intervention and support from Members of Parliament from various political parties for favorable consideration of levy of GST at lower slab of 12%. “Lowering the rate of GST on Biscuit would result in higher production and would not affect revenue to the Central and State Governments,” said Mr. Deepak Bherwani, Director, Krown Biscuits.

IBMA has requested for meetings with the Ministers and officials at the earliest, to apprisethem of our view point.

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