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Ahead of GST council meeting, biscuit MSMEs eye at reduction in tax rate

Updated: Mar 09, 2018 05:42:18am
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Ahead of GST council meeting, biscuit MSMEs eye at reduction in tax rate

New Delhi, Mar 9 (KNN) With the GST council to meet on 10th March to review the taxation, the biscuit industry comprising of a fair share of Micro, Small and Medium Enterprises (MSMEs) are expecting a lower tax rate on the item.

Talking to KNN, Prem Pherwani, CEO of Avon Biscuits said that the high 18 per cent tax rate has already impacted the biscuit manufacturers to a large extend with the tiny and micro units on the verge of closure.

GST rate

Explaining further, Prem said that earlier in the previous tax regime, the item including bun and other bakery items were exempted, whereas an 18 per cent tax now is proving to be fatal for the industry.

“The tax rate seems to have been rationalised considering only big players, it doesn’t seem rational for the small manufacturers”, he added.

Prem further said that for a small manufacturer it is impossible to meet such big tax bracket.

“Most of the input items for the sector fetches 5 per cent on the input side, whereas the output is being charged at 18 per cent which the costumer isn’t willing to pay, the sales have already hit lowest of the low”, Prem lamented.

Filing Complications

In most of the cases, the manufacturing unit is a one man show, the owner is both the manager and the supplier himself, it is very difficult for him to keep up with the compliance norms under GST, he said.

To meet the GST norms, the manufacturer now has to hire a CA, who is charging over 75000 per year. This added cost along with a high GST is making the industry move from bad to worse, Prem added.

Listing expectations from the GST council ahead of the upcoming meeting, he informed that the council must consider a 5 per cent rate for the sector considering the fact that it employs a fair share of population. (KNN/DA)

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