Biscut Industry seeks tax relief

Hyderabad, Aug 31 (UNI) The Biscuit Manufacturers Association today sought a tax relief for the industry in view of the spiralling input costs in prices of wheat, sugar and vanaspati.

The Association, in a memorandum submitted to Andhra Pradesh minister for Commercial Taxes Konathala Ramakrishna and Finance and Planning Minister K Rosaiah pointed out that the current 12.5 per cent rate of Value Added Tax (VAT) falls short of the expectatons'of the industry.

The Annual consumption of biscuits in the state was expected to cross 55,000 tonne in 2006-07 valued at Rs 310 crore, they said in a release here today.

They said savories, namkeens, wafers and over 50 other food items had been granted a concessional rate of VAT at four per cent.

Biscuits which according to the Indian Readership Survey (2005), were consumed by over 72 per cent of Indian population, were being burdened with an eight per cent excise and 12.5 VAT.

The Minister for Commercial Taxes Ramakrishna had assured the biscuit industry that the Empowered Committee of State Finance Ministers on VAT might consider granting relief for biscuits.

The memorandum said that Rs 8,500 crore Indian Biscuit Industry had maintained the price of mass consumption biscuits like Glucose, Marie and Milk for the past 11 years. The raw material cost alone accounted for nearly 49 per cent of the MRP and said in 2005 approximately Rs 3,500 crore worth of wheat flour, sugar and vegetable oil was consumed by the industry.

The Indian Biscut Industry was the largest processor of agriculture products and therefore it must be offered concessions in line with brand, the memorandum pointed out.

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