The GST Council’s decision to cap the cess at 15 per cent over the expected peak rate of 28 per cent on aerated beverages and cars, and varied other rates on sin and luxurious goods has created a flutter in the market.
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Though a four-tier rate structure for the new levy has been cleared, the fitments of commodities in these tax slabs would be done after March 31.
While the cess on aerated beverages could spike the retail prices, for some organised players in tobacco industry it may not have much impact. However, the actual impact on prices will be known only after the fitment of slabs for these products. Fearing such a levy, soft drink companies have been pitching for a differential GST structure based on sugar or calorie content. Hit by higher levies in the form of soda or sugar tax in several countries, companies such as Coca-Cola and PepsiCo have made commitments to cut down on sugar content.
The Hindu Business Line, 17 March 2017