34% Tax Rate, not 43%, is what Coca-Cola wants

Coca-Cola wants tax rate on aerated drinks in proposed GST to be around 34%. A cess of 15% on aerated drinks over 28%, which comes out to be 43% total tax on aerated drinks has been proposed in GST.

Coca-Cola wants cess rate not to exceed 6% on the peak tax rate.

“They removed aerated drinks from the sin category, on which an incremental duty was charged on tariff. The government has admitted that aerated drinks are not sin,” R Sridhar, Coca-Cola’s vice president – taxation, has been quoted as saying in the BS report.

Last year, an official with company hinted that if government impose 40% tax on aerated beverages, this might forced them to shut down some of its factories.

“An acceptance of the Arvind Subramanian committee recommendations with regard to GST rate of 40 per cent on aerated beverages will have a negative ripple effect on the entire beverage ecosystem … It will lead to a sharp decline in consumer purchase and for a demand-driven industry, it will mean a significant rationalisation of manufacturing capacity,” Coca-Cola India and South West Asia vice-president (public affairs & communication) Ishteyaque Amjad had said.

Last year, a study by London-based Action on Sugar found the cola giants using double the quantity of sugar in their processed drinks as compared to those in Europe. To cite an example, AOS said Fanta in Ireland, Argentina or the UK had six teaspoons of sugar whereas the product in India contained almost double.

Firstpost.com, 22 March 2017


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