New Delhi: Beverages major Coca-Cola India today said it will have to shut down some factories in India if the government accepts a proposal to impose 40 per cent 'sin tax' on aerated beverages.
This is the first major case of a big company raising red flag against any provision of the proposed GST which is as such stuck in the political deadlock.
"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.
"In these circumstances, we will have no option but to consider shutting down certain factories," Coca-Cola India and South West Asia Vice President, Public Affairs & Communication Ishteyaque Amjad said in a statement.
"Arvind Subramanian Committee recommendations of including soft drinks in the 40 per cent GST category will make our industry unviable," he added.
Reiterating the India is one of its important markets, the company said: "The Coca-Cola Company believes in India and identifies it as one of its strategic growth markets. The Coca-Cola system in India has already invested more than USD 2.5 billion...Our system is on course to invest another USD 5 billion in India by the end of 2020."
Last week, a panel headed by Arvind Subramanian had recommended a three-rate goods and services tax (GST) structure of 12-17/18 - 40 per cent, the last category being for products like tobacco and luxury cars.
This is the first major case of a big company raising red flag against any provision of the proposed GST which is as such stuck in the political deadlock.
"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.
"Arvind Subramanian Committee recommendations of including soft drinks in the 40 per cent GST category will make our industry unviable," he added.
Advertisement
Last week, a panel headed by Arvind Subramanian had recommended a three-rate goods and services tax (GST) structure of 12-17/18 - 40 per cent, the last category being for products like tobacco and luxury cars.
Advertisement
COMMENTS
Advertisement
GST Collection Stood At Rs 1.73 Lakh Crore In May, Says Ministry Not Necessary To Make Arrests In Every GST Case: Supreme Court Tells Centre Bill To Amend Central Goods And Services Tax Act Introduced In Lok Sabha Nurse Raped, Killed On Way Home, Body Found 9 Days Later In UP "Took Advantage Of His Addiction": 5 Charged Over Matthew Perry's Death "Don't Expect Anything From Me": Kolkata Hospital's New Principal Loses Cool Ukraine, Russia Both Claim Advances In Kursk Region Gaza Ceasefire Talks Underway In Qatar As Deaths Top 40,000 Trump To Hold Press Conference, His Campaign Adds Senior Advisers Track Latest News Live on NDTV.com and get news updates from India and around the world.