IBA calls for lower tax on carbonated fruit drinks

The Indian Beverage Association (IBA) has requested the government to lower the tax on carbonated fruit drinks to either 12% or 18% GST slab from the current 40%, including 28% GST and 12% Compensation Cess.

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The Indian Beverage Association (IBA) has urged the Centre and State governments to reduce the tax on carbonated fruit drinks and remove them from the “sin” goods category. The industry body has requested that these beverages be placed in the 12 percent or 18 percent GST slab, instead of the current tax rate of 40 percent, which includes 28 percent GST and 12 percent Compensation Cess.

In their representation, the IBA highlighted “The Indian Beverage Association (IBA) feels that such a higher rate of tax on carbonated fruits beverages would be an impediment to the growth of non-alcoholic beverages industry and hinder investment in the area. Reduction in the rate of tax on ‘carbonated beverages with fruit juice’ to 12 per cent GST or to a maximum level of 18 per cent GST, would bring about several beneficial results.”

Additionally, the IBA has requested a reduction in the GST on zero-sugar or zero-calorie aerated drinks. They contend that these products are healthier alternatives to regular aerated drinks and should have a reduced GST rate of 18 percent, rather than the current 40 percent (28 percent GST plus 12 percent Compensation Cess).

“The IBA is of the view that the two products — regular carbonated drinks and Zero Sugar drinks — being dissimilar products, the tax rates should also be dissimilar,” the industry body added.