AICPDF has requested the government to reconsider this decision and prioritise policies that promote affordability, growth and sustainability in the FMCG sector.
New Delhi: All India Consumer Products Distributors Federation (AICPDF), an umbrella body that represents FMCG distributors in the country, has appealed to the government not to increase the GST rate hike to 35 per cent on aerated beverages.
This move could “negatively impact” distributors, retailers and consumers, particularly in rural and semi-urban areas, said a statement from AICPDF, which claims to represent 4,50,000 distributors and 13 million ‘Kirana’ stores.
“Aerated beverages…serve as affordable refreshment options for lower-income groups and rural populations. Any increase in tax will not only impact their consumption but also jeopardise the earnings of distributors and retailers across the country,” it said.
It has requested the government to reconsider this decision and prioritise policies that promote affordability, growth and sustainability in the FMCG sector.
The Group of Ministers on GST rate rationalisation, in its meeting earlier this month, suggested that the tax rate on sin goods like aerated beverages, cigarettes, tobacco and related products be hiked to 35 per cent, from the current 28 per cent.
Aerated beverages such as carbonated soft drinks, sparkling waters etc are currently taxed at the highest GST slab of 28 per cent plus a 12 per cent compensation cess.
According to AICPDF, distributors are already facing significant margin pressures due to slowing consumer demand and rising operating costs.
“An increase in GST would likely lead manufacturers to cut costs, further reducing the margins of distributors and retailers, thereby impacting their incomes and livelihood,” it said.
Moreover, a GST hike would result in a significant increase in prices, making these products unaffordable for a large section of the population and leading to a steep decline in sales.
It has urged the government to “refrain from implementing the proposed GST rate of 35 per cent” and “rationalise and lower” it.
