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Maharashtra Snack Food Association demands 5% GST on namkeens & farsan
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Friday, 23 June, 2017, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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Ajit Mota, president, Snack Food Association of Maharashtra, demanded that the twelve per cent goods and service tax (GST) imposed on Indian namkeens, savouries, farsan, potato chips, banana chips, etc. by the Goods and Service Tax (GST) Council be reduced to five per cent to maintain uniformity with the GST levied on sweetmeats and mithai.
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The GST on namkeens is twice the present tax, but the industry hardly receives any input credit, as its raw materials are agro-based. There is no tax on raw materials like potatoes, bananas, maida, besan, salt, pulses, etc. There is only a marginal tax on the masala used.
Namkeens, sweets and chips are made from the same ingredients and sold at the same establishments. So it would be quite difficult for shop owners to maintain exact bifurcation of sales. Therefore, there would be a big avenue for tax officials for manipulations and corruptions.
And with the imposition of 12 per cent GST on these products, their prices would increase by at least six to eight per cent. Mota said, “Pan-India the size of the namkeen industry is large, with a growth rate of eight to ten per cent per annum. And 95 per cent of the industry operates in the unorganised sector.”
“This industry primarily consists of home-based businesses, cottage units and small-scale units, which operate at very thin margins. Thus, the industry cannot sustain a GST rate of 12 per cent. This will result in the shutting down of several units, which would lead to large-scale unemployment,” he added.
Pradeep S Jain, honorary secretary, Shree Mumbai Mishtan Vyavasai Sahakari Mandal Ltd, also urged the authorities to reduce the rate of GST imposed on namkeens, potato chips and banana wafers to five per cent, and asked the authorities to merge it with the rate of sweetmeats and mithai.
K L Daga, committee member, Snack Food Association of Maharashtra, stated, “There is no clarity of GST rate on hot snacks like dhoklas, jalebis, samosas, kachoris, etc.”
“If these hot snacks are consumed in air-conditioned restaurants, they would attract 18 per cent GST, while it is five per cent on wada pao. Thus, a proper clarification on the rates of GST on hot snacks is awaited from authorities,” he added.
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