Biscuit industry yet to recover from note ban impact

New Delhi: 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 PTI.

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.


Trending News

Nusli skips Tata Steel EGM, result awaited

Ratan Tata saving British Steel at the cost of Tata Steel India: Nusli

Blackberry Partners with Optiemus

OPEC and non-OPEC producers achieve 86 per cent conformity to output cut

Reliance eyes defense.

RIL stock maximizes 5%, market valuation ranks top Rs 4 lakh crore

How Fintech and Payments Innovations Will Disrupt Global Ecommerce

The New Nokia 3310 Gets A Camera, Expandable Storage, And A Design Makeover

Everyone Can Adopt This Founder's One-Step Productivity Advice

Reliance Jio plans to overtake Airtel, hit 50% revenue market share in 4 years

Samsung unveils Nougat for S6, and S6 Edge

Sensex up 146 Points on exit polls forecast

What the CIA WikiLeaks dump tells us: Encryption works

Idea Cellular to offer free incoming calls on domestic roaming

BJP at Centre and in states will spur growth reforms: India Inc

Forex reserves up $1.218 billion to $364 billion

Following emergent win in UP, Centre May take may take tough reform decisions.

The Top Five Challenges Of Doing Business In Dubai

My 8 Favorite Tools for Driving Business Growth

Nike's hijab line for Muslim female athletes, and Sydney boys on the importance of feminism

Uber wins driver-status case in France on legal technicality

Adani Hopes to Start Australian Coal Mine Project in August

Tesla’s $1 Billion Cash Raise May Fall Short

Race to Build Offshore Wind Farms That Float on Sea Gathers Pace

7 Things Every Entrepreneur Should Do Before 7 a.m.

Can Main Street Businesses Thrive in the Trump Era?

Russia, Saudis Move at a Different Pace as Oil Cuts Scrutinized

China Southern Said in Talks to Sell Stake to American Air