The Indian Beverage Association (IBA) expressed concerns over a potential GST rate hike on aerated drinks. Currently, these beverages face a 40% tax (28% GST + 12% cess). The IBA has appealed to the government for a removal of the 12% cess, aiming for a 28% tax rate.
Indian Beverage Association (IBA), which counts Coca-Cola, Dabur, PepsiCo, Reliance Consumer Products and RedBull as members, said it is “concerned” over a likely further increase in the goods and services tax (GST) rate on aerated drinks.
“We have zero-sugar products taxed at 40% today. We have made representations at all levels to the government, including to the GST Council, but taxation remains a bottleneck at all levels,” C.K. Jaipuria, chairperson of the IBA, said at a National Beverage Conclave on Wednesday.
According to media reports earlier this week, a group of ministers (GoM) has recommended increasing GST rates on carbonated beverages, cigarettes and tobacco to 35%. As of now, all carbonated drinks are taxed at 28% and an added compensation cess of 12%, which takes the overall tax on the category to 40%.
Earlier on Tuesday, the Central Board of Indirect Taxes and Customs (CBIC) said news reports which said a ministerial panel has recommended changes in GST on select categories were “speculative”.