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Last Updated : Mar 12, 2017 09:26 PM IST | Source: PTI

Biscuit industry yet to recover from note ban impact

The biscuit industry in thencountry has taken a hit of up to Rs 700 crore and rural salesncontinue to suffer after the government scrapped old highnvalue notes.

The biscuit industry in the
country has taken a hit of up to Rs 700 crore and rural sales
continue to suffer after the government scrapped old high

value notes.

"Due to cash crunch, there was a significant impact on
the biscuits industry. The industry took hit of Rs 500-700
crore on sales due to demonetisation," Mayank Shah, vice
president, Biscuit Manufacturers Welfare Association, told


Shah, who is also deputy marketing manager at Parle
Products, said that while urban sales have recovered, rural

sales continue to remain under pressure.

"We expect rural sales to come to normal levels in 1-2

months time," he added.

Last November, the government had scrapped Rs 500 and Rs

1,000 notes, leading to a severe cash crunch in the system.

The biscuit industry have sought exemption in the proposed
Goods and Services Tax (GST) regime for low-priced glucose and

other varieties.

The inclusion of low-priced glucose, milk and marie
biscuits in GST will lead to shutting down of about 240

biscuit factories, warn manufacturers.

Industry officials said that low-priced biscuits under Rs
100 per kilogram are low margin products and are currently

exempted from the central excise duty.

"A proposed flat 12 per cent GST on biscuits will be a
grave injustice to the poor as biscuits retailing below Rs 100
per kg are treated as merit goods. If these products are
included then about 240 biscuit factories will shut down,"

Shah said.

Low-cost biscuits which at present account for 40 per cent
of total sales may fall down to 20-25 per cent if they are

taxed under GST.

Biscuit manufacturers, however, are in consensus that the
government can levy high tax of even up to 18 per cent on

higher priced biscuits.

Biscuits in India are priced in the range of Rs 70 to Rs

700 per kg.

As per Biscuit Manufacturers Welfare Association, which
has over 50 members, biscuits industry at present in India in
estimated at Rs 37,500 crore.

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First Published on Mar 12, 2017 07:52 pm
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