Ease of doing business for MSMEs: Some of the beverages, available at micro or small retail outlets, with reportedly low sugar content are iced tea, lemonade, coconut water, etc., in comparison to packed sweetened fruit juices, soft drinks, energy drinks, etc., which have relatively higher sugar content.
Ease of doing business for MSMEs: Confederation of All India Traders (CAIT), which represents around 8 crore traders in the country, on Monday urged finance minister Nirmala Sitharaman to reduce the Goods and Services Tax (GST) on beverages which constitute almost 30 per cent of the total turnover of small retail outlets such as kirana shops, pan shops, general stores, hawkers etc.
Currently, GST and cess levied on beverages comes to 40 per cent which heavily blocks the working capital of small retailers, CAIT said. “If this is lowered rationally, it will increase the turnover of small shops which will yield more revenue to central and state governments,” said CAIT National President BC Bhartia and Secretary General Praveen Khandelwal in a statement.
As an alternative, CAIT suggested a “Sugar-Based Tax (SBT)” system to tax products as per the sugar content available in them. “This means, the higher the sugar in products, the higher the tax. For beverages that are in the low and no-sugar category, this will reduce taxes, opening up capital for the retailers to make more purchases, increase sales and double their incomes. This also benefits the common man significantly, by reducing their household costs at the same time,” the statement noted.
Some of the beverages, available at micro or small retail outlets, with reportedly low sugar content are iced tea, lemonade, coconut water, etc., in comparison to packed sweetened fruit juices, soft drinks, energy drinks, etc., which have relatively higher sugar content.
The traders’ body said its proposal is in alignment with the recommendations made in the Economic Survey of 2023, which suggested that India should move from food security to nutritional security. “Naturally, a key component in that would be the proposed sugar-based taxation system,” said CAIT.
In pursuance of this, the association said that it released a white paper in association with research firm Hansa Research that discusses ‘Doubling Retailers’ income through a focus on the beverages sector. It added that the paper also discusses how tax rationalisation can add to the revenue growth of the government and largely convert the unorganised/ counterfeit economy to a formal economy leading to more investments coming into the country.