6:01 pm - Tuesday December 12, 2017

Snack Food Association Demands 5 Percent GST Rate Instead of 12 Percent on Namkeen-farsans

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Business Wire India

(L-R) Kavarla Daga - Rajkamal Namkeen, Ajit mota - Mota chips, Shri Deepak kesarkar - Minister of State for Finance and Planning, Shri Sudhir Mungantiwar - Finance Minister of Maharashtra, Jignesh Bhai, Jitendra Khakkar- Janta Wafers, Rajubhai Gala - Bombay Peanut Co. and Jitendra Chheda - Tip Top Wafers
(L-R) Kavarla Daga – Rajkamal Namkeen, Ajit mota – Mota chips, Shri Deepak kesarkar – Minister of State for Finance and Planning, Shri Sudhir Mungantiwar – Finance Minister of Maharashtra, Jignesh Bhai, Jitendra Khakkar- Janta Wafers, Rajubhai Gala – Bombay Peanut Co. and Jitendra Chheda – Tip Top Wafers

  • Snack Food Association of Maharashtra demands unified GST rate for Namkeen, Sweet Meats, Mithai & Misthans at 5%
  • Pan India Namkeen industry size is large with 8% to 10% growth rate per annum: this growth rate can not sustain higher GST rate
  • With 12% GST rate for Namkeen, with no possibility of input credit, the effective prices of all the products will go up by at least 6% to 8%
GST Council has announced 12% GST rate for Indian traditional Namkeen, Savories, Farsan, Potato Chips, Banana Chips etc. This rate should be reduced to 5% to maintain uniformity with GST rate for Sweet Meats & Mithai, stated Mr. Ajit Mota, President – Snack Food Association of Maharashtra.

The GST rate for Namkeen is 12% (double from the present tax) but industry hardly receives any input credit as its raw materials are agro based. There is no tax on raw materials like potato, banana, maida, besan, salt, pulses etc. There is only a marginal tax on masala. Namkeens & Sweets are sold from the same shop and are interrelated products from the point of view for common men consumption. With 12% GST, the effective prices of all the products would increase by at least 6% to 8%.

Sweets, Namkins, Potato Wafers, Banana Wafers and other similar products made from similar ingredients are sold from same shops. So it would be quite difficult for shop owners to maintain exact bifurcation of sales. Thus it leaves a big avenue for tax officials for manipulations and corruptions.

Mr. Ajit Mota further stated that Pan India Industry size for Namkeens is large with 8 to 10% growth rate per annum. 95% of the industry has been located in the unorganized sector. Mainly this industry consists of home units, cottage units and small scale units. These units operate at a very thin margin. Thus, the industry could not sustain 12% GST rate, resulting in closing down of units, which would lead to large scale unemployment.

Mr. Pradeep S. Jain, Hon. Secretary: Shree Mumbai Mishtan Vyavasai Sahakari Mandal Ltd. urged the authorities to reduce the GST rate for Namkeen, Potato Wafer, Banana Wafer to 5% from the proposed 12%. He has asked the authorities to merge it with the rate of Sweet Meats, Mithai and i.e. @ 5%.

Mr. K.L. Daga, Committee Member of the Snack Food Association of Maharashtra informed that there is no clarity of GST rate on hot snacks like Dhokla, Jalebi, Samosa, Kachori etc. If the hot snacks are consumed in AC Restaurants, it would attract 18% GST rate. It is 5% on Vada-Pav. Thus proper clarification of GST on Hot Snacks is still awaited from authorities.

For further information, please contact Mr. Ajit Mota on Te. (022) 2835 3301 /2835 1280. Email: ajitmota@ymail.com

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