In an interview to CNBC-TV18, Amit Jatia, VC of Westlife Development talked about what goods and services tax (GST) mean for the burgers (McDonald's).
Below is the verbatim transcript of the interview:
Surabhi: What is your initial assessment as far as demand is concerned and also help us understand your effective tax rate pre and post GST?
A: I am happy that GST is finally rolled out. I think it is a huge tax reform in India and what is most important for retailers like us is that now we have uniform pricing across all our states, so because there is one 18 percent tax especially on food and restaurants, not only have we got uniform pricing across all our state but McDonald's has made a bold move of including GST into the price and sharing it with the customer by saying 'what you see is what you pay' - and I think customers are loving it because if they see on the menu board, for example Rs 25 and that's exactly what they are now paying rather than three different taxes and taxes being different in every state. I think it is a super reform. I think it was much needed and for us particularly in the retail it has worked quite well so far.
Anuj: Is the burger cheaper or more expensive?
A: It has been neutral for us because there were certain states where tax was more than 18 percent. Wherever it was more than 18 percent, the tax has now better for the consumer and our burger prices have come down. In certain states it was slightly lower than 18 percent where we had to take the price slightly higher but net-net we have ensured that. For us it is sort of neutral and for the consumer it is neutral, in fact a bit advantageous. So we have tried to make sure that it is working well for the consumer as well.
For entire interview, watch accompanying video.
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