The Confederation of All India Traders (CAIT) has pitched for rationalisation of taxes in the beverage sector to increase retailers’ income share. The industry body has suggested nutrition-based GST in accordance with sugar or other nutrient levels.
In a summit held recently, the traders’ body released a white paper which said while the non-alcoholic ready-to-drink segment is estimated at ₹58,000 crore in terms of value, only about 20 per cent of it is in the organised segment. “Currently, this segment contributes about 11 per cent revenue of a retailer and less than 1 per cent revenue of the Government, basis our estimates. Even a 20 per cent movement from the unorganised to formal economy can boost the Government’s revenue substantially,” the white paper said.
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It added that nutrition-based taxation, which can be levied on the basis of sugar or other nutrients, can also help the government get higher revenues from the sector. “Nutrition-based taxation is essentially ‘low taxes for low sugar’ and ‘lowest taxes for no sugar’ (which use non-nutritive sweeteners),” it added.
In a statement, Praveen Khadelwal, Secretary-General, CAIT, said, “CAIT has always worked for the betterment of the Indian self-organised sector comprising small and medium retailers. This report, a joint collaboration between CAIT and Hansa Research, focuses on the need for tax rationalisation and more conducive policies for the beverages sector, which contributes to a large share of incomes of retailers. Through lower tax rates and formalisation of this sector, we believe retailers and traders can benefit significantly and increase their profitability. We urge the Government to focus on a nutrition-based tax regime to achieve its goal of nutritional security.”