Ice-cream makers pitch for cut in GST

Ahead of the Goods and Services Tax (GST) council meeting on Friday, ice-cream makers demanded that GST on ice-cream should be cut to 5% from the current 18%.

According to Indian Ice-cream Manufacturers’ Association (IICMA), other dairy and food products fall under 5% or 12% slab. However, ice-cream is taxed at 18%.

“Why is ice-cream treated as a luxury item while other food and dairy products fall under lower slabs?” asked Rajesh Gandhi, president, IICMA. The association on Thursday kicked off a 3-day “Ice-Cream Expo 2019” at Mahatma Mandir in Gandhinagar.

The pan-India association has requested the government to bring the GST on ice cream into the 5% GST slab. Ice-cream manufacturers say dairy farmers will benefit if GST on ice-cream is lowered.

The hold that the industry deserves the consideration for the benefit of farmers who are unable to sell dairy products. Reduction in GST will also bring down the retail prices of ice-creams to benefit consumers, say industry players.

The industry complained that ice-cream makers cannot opt for composition scheme, under which businesses are allowed pay lower tax at 1% if their turnover is less than Rs 1.5 crore.

“The government has placed ice-cream makers in the same category as pan masala and tobacco manufacturers, who are also not permitted to opt for composition scheme,” said industry players.

Despite the higher tax burden, the industry is bullish about achieving strong growth as ice-cream consumption in India is much lower than in many other countries. The Indian ice-cream industry is poised to grow by 17% till 2021.

The size of the ice-cream industry in India is estimated to be Rs 19,500 crore, which includes turnover of unorganised players as well. It is expected soon to touch Rs 20,000 crore. “If we talk about top ice-cream makers in organised sector only, their cumulative turnover is Rs 9,000 crore,” said Gandhi.

Source:- https://retail.economictimes.indiatimes.com/news/food-entertainment/personal-care-pet-supplies-liquor/ice-cream-makers-pitch-for-cut-in-gst/71218780