Cigarette, Aerated drink sectors face severe crisis on proposal of 40% GST by panel

Cigarette smoke will be 20 percent more expensive
Photo credit: Foter.com

If the government considers on GST of Subramanian Committee recommendations then product such as soft drinks Coke, Pepsi and Paan Masala with Cigarette smoke will be 20 percent more expensive. “Subramanian committee said in its recommendations to levy 40 percent on such products”.

According to industry officials associated with tobacco and soft drinks that after acceptance of Subramanian committee such products will increase prices by 20 percent, which would be bad for both industries. Because these industries are already struggling with negative growth.

According to an official attached to the soft drink industry, if the government holds the Subramanian Committee’s recommendations then it will not be less than the risk for the soft drinks industry. The soft drinks industry is already facing negative growth. It will not be good to bring soft drink in a range of tobacco products. Currently the government is taking Rs 14,000 crore excise duty on soft drinks industry. 18 percent is part of PepsiCo and Coco Cola in this. The tobacco industry officials argue that 40 percent of GST people will run away fast to harmful and cheap products such as Bidis, Tobacco and Khaini. This time, India’s tobacco market share of such products is 89 percent. According to an official, Currently, cigarette industry is facing a crisis due to a sharp increase in excise duty by the government. In the last three years, the government has increased excise and VAT of 98 percent and 124 percent. As a result, cigarette sales declined by 15 percent in three quarters is recorded. Officials argue that, if Government accept the proposed rates of GST then it would be a major blow for the cigarette industry.

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