Biscuits At 18%?
While the council seeks to tax branded biscuits costing less than Rs 100 per kg at 18 percent, the industry is lobbying for 12 percent to claim a tax advantage to the tune of Rs 900-1,000 crore, the first official quoted above said. Biscuit manufacturers claim that they are largely consumed by the poor, he said.
Biscuits costing less than Rs 100 per kg account for nearly half of the overall biscuit market worth Rs 35,000-40,000 crore, the official said.
Unbranded biscuits costing less than Rs 100 per kg may be taxed at 12 percent, the second official cited above said.
Currently, biscuits below Rs 100 per kg do not attract central excise, but value-added tax (VAT) in states varies from 4.5-14.5 percent, said Bipin Sapra, partner, indirect tax at EY India.
For biscuits above Rs 100 per kg, the Centre levies 6 percent excise, while VAT ranges from 6-14.5 percent, Mayank Shah, category head of biscuits at Parle Products Ltd., told BloombergQuint.
Sapra said there should be a uniform rate for both branded and unbranded biscuits. As the rate on biscuits in the pre-GST regime is considerably variable, so taxing them a lower slab will make more sense, he said.