PNS/ DEHRADUN
Despite the GST regime having simplified taxation, brought stability and enabled record collections, the experts in the industry said that with the present structure having multiple tax slabs there, complying with the taxation rules is becoming difficult. They demanded rationalisation of the GST rate structure and lowering of tax slabs.
They said that the Group of Ministers (GoM)’s recommendation of a new slab with a tax rate of 35 per cent for tobacco products and carbonated or aerated beverage is contrary to the objective of GST rate rationalisation.
The proposed increase in GST is likely to further reduce consumption and demand, impacting economic growth, the industry experts argued.
While dwelling on the Impact of proposed increase in GST Aerated drinks, the partner, JSA Upendra Nath Sharma said that as per a cross-country World Bank study on sugar-sweetened beverages, India has one of the highest tax rates for carbonated soft drinks at a total tax rate of 40 per cent as of 2023. “Countries like the UK and France have adopted a sugar-layered tax approach, i.e. high sugar/high tax and low sugar/low tax. Growing health consciousness in India has seen consumers switching to lower sugar content products, creating a new market for reformulated aerated beverages. However, a uniform tax on sugar carbonated drinks disincentives producers,” he said.
Further, he warned that the proposed 35 per cent slab is excessive and would drive the consumers, already reeling under inflation, to shift to cheaper products or the grey market.
