“Considering the existing indirect tax structure for aerated beverages, which effectively results in a cumulative tax of 39-40 per cent, prices of aerated beverages could be impacted adversely in case the maximum cess of 15 per cent is imposed in addition to the proposed cumulative GST rate of 28 per cent. Creditability of such cess in the supply chain could further aggravate the impact in case the same is not available.” However, the overall impact could be slightly negated by the additional credits that the the industry could earn under GST, he added.

Krishan Arora
Partner, Grant Thornton India LLP

This article apeared in The Hindu Business Line on 17th March, 2017.