Coca Cola India has announced that it has no other option but to shut down some of its factories if a sin tax of 40 per cent is imposed on aerated drinks within the proposed Goods and Services Tax. “An acceptance of the Arvind Subramaniam 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,” Coca Cola said in a statement. Chief Economic Adviser (CEA) Subramanian-headed committee on GST recommended a sin tax of 40 per cent on aerated drinks, tobacco and luxury cars while the suggested standard GST rate is 17 to 18 per cent.
“This is not in line with the 'Make in India' programme launched by the government of India, which recognizes 'Food Processing' as an important sector within the programme and specifically mentions our industry under the line item category of 'Consumer food: packaged food, aerated soft drinks, packaged drinking water' and also 'Beverages: fruit-based and cereal-based'.” Reiterating its commitment to India, it said it plans to invest $5 billion by the end of 2020, having already invested $2.5 billion and running 57 factories supporting 7,000 distributors, 3000,000 retailers and creating direct and indirect employment to more than 200,000 people.
