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Plea to scrap ST on bread in Karnataka

Our Bureau

BANGALORE, Feb. 25

THE Karnataka Wrapped Bread Manufacturers Association has petitioned the State Government for removal of sales tax on short shelf life products such as bread.

The recent uniform tax rule has hit the 50 odd bread manufacturers in the State adversely as sales tax went up from two to four per cent. The Government increased the tax to the nearest slab, while it could have removed the tax altogether, says the indus try.

As a compromise, the bakeries have suggested that the low shelf life products such as bread and bun be tax exempt from sales tax, while bakery products with slightly longer shelf life such as soup sticks, confectioneries, pastries, drops, doughnuts, puff s, rusks and so on could continue to be taxed at four per cent.

An average of 6-10 per cent of low shelf life items go waste because they remain unsold.

At present, branded bread is taxed 5.6 per cent, including the four per cent sales tax, one per cent turnover tax, and surcharge of 15 per cent.

Incidentally, all bread in the State carrying a name comes under the "branded products" umbrella unlike in the rest of the country where only the registered brands are considered branded and taxed accordingly.

The Governments in Delhi, Haryana, Rajasthan, Madhya Pradesh, Gujarat, Maharashtra, Kerala and West Bengal have agreed to exempt branded bread from ST and TOT.

In Karnataka, bread manufacturers are bracing themselves for a further increase in costs as the ST on raw materials such as yeast, vanaspati, edible oil, sugar, starch and raisins, have also gone up.

``We are refraining from increasing the price to the consumers,'' said Mr. B.S. Bhat, of `Beekay' bakery products and Hon. Secretary, Karnataka Bread Manufacturers Association. For one, the industry is hoping that the imminent Central and State budgets w ill solve their problem.

For another, it is cheaper to sell at the same rate than to discard a month's supply of expensive waxed wrapping paper which has the price printed on it. ``Maybe we will reconsider the pricing after a month,'' he said.