The Hindu : Andhra Pradesh / Hyderabad News : Biscuit manufacturers seek cut in VAT

Online edition of India's National Newspaper
Friday, Sep 01, 2006

Andhra Pradesh

Andhra Pradesh - Hyderabad

Biscuit manufacturers seek cut in VAT

Special Correspondent

Association makes strong plea for excise duty exemption too

The industry has pegged the prices for past eleven years despite high input costs
The VAT on biscuits amounts to 8 p.c. as against 50 other food items which are charged at 4 p.c.

Price rise in biscuits can lead to drop in consumer flow

HYDERABAD: The Biscuit Manufacturers Association has made a strong plea for completely exempting biscuits from excise duty and reducing VAT from 12.5 per cent to 4 per cent. It said the Rs.8,500-crore industry had maintained the price line for the past 11 years in spite of spiralling input costs and reduction in margins. BMA president Maria Iyer wanted biscuit industry to be treated on a par with other segments of food processing industry. She said the weighted average increase in the input costs (wheat, sugar, vanaspati and diesel) since 1996 had been 55 per cent. While `namkeens' (salted eatables), wafers and over 50 other food items have been charged four per cent VAT, biscuits which according to Indian Readership Survey are consumed by more than 72 per cent population were being levied an 8 per cent excise duty and 12.5 per cent VAT. Ms. Iyer said that a 100 gram pack of glucose biscuits priced at Rs.4 would provide 450 kilo calories of energy, meeting 22 per cent of the 2,000 kilo calories recommended as part of daily dietary allowance.

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Andhra Pradesh