PARLE PRODUCTS PVT LTD GST AND RETAINING COMPETITIVENESS

      By enacting GST in July 2017, the Indian Goods and services tax (GST) Council eliminated the myriad of taxes and tax rates that were in place on a variety of items.2 The council also eliminated the variable tax structure that applied to various varieties of biscuits as part of this tax reorganization; The same GST rate of 18% was applied to all varieties of biscuits, including mass-market biscuits priced below $1,004 per kilogram (kg) and mid-range and premium biscuits priced above $100 per kg. Before the introduction of the GST, mass-market cookies (i.e., cookies priced under 100 per kg) were subject to a tax rate of roughly 14%, while cookies priced above 100 per kg were subject to a 22 to 24% tax rate. Companies will be obliged to raise prices as a result of the growth in input costs and limited profit margins in the low-priced biscuit category. As it will be challenging to make any money in this market, biscuit companies won't be motivated to operate in the category below