Dairy companies have sought lower goods and services tax on flavoured milk and ghee to help revive sales and pay farmers a better price.
The companies want GST on ghee and flavoured milk to be lowered to 5% from 12% currently. The demand comes ahead of a meeting of the GST Council, which administers the tax, this month.
According to traders, about 300,000 tonnes of ghee are sold annually in India and sales have dipped 5%.
“Since the 12% GST has been imposed, the organised sector has seen a drop in sales of ghee and flavoured milk. The sale of adulterated ghee has picked up, as per trade information,” said RS Sodhi, managing director of Amul, adding that they expected GST to be reduced this month.
With the drop in sales, Amul reduced ghee prices twice in the past six months, said Sodhi.
“We had to reduce milk price to be paid to farmer to ensure price of ghee was less. A reduction in tax slab will ensure farmers get remunerative rates,” he said.
Sodhi said the tax rate was uneven in the same product category and cited the example of sweetened milk being taxed at 5% and flavoured milk at 12%.
“All milk-based beverages should be under one slab of 5%,” he said. – www.economictimes.indiatimes.com [14-11-2018]
Source : PTI