TPCI urges govt for flat 5% GST on all processed food items to spur growth

The Trade Promotion Council of India (TPCI) on Friday urged the government for a flat 5 per cent Goods and Services Tax (GST) on all food processed items to spur the growth of the sector.

The council also pushed for input tax credit on food sales; tax holiday for five years for companies investing in infrastructure, including digital infrastructure; special incentives to food processing through interest subvention, and lower taxes; and competitive import tariffs over five years, with lowest or nil slab on inputs or raw materials.

TPCI Founder Chairman Mohit Singla said non-tariff barriers in the food sector are impacting the industry and trade.

"The new standards such as Alimentrus Codex Standard of EU require a lot of investment to meet. Therefore, TPCI demands a separate fund/ incentives for R&D and testing labs for meeting the global standards," he added.

Chairman, Food and Beverages Committee, Vivek Agarwal said some of the items like molasses, white chocolate, cocoa butter, cocoa powder, cocoa chocolates, essences and concentrates of coffee attract 28 per cent GST.

Similarly, products such as condensed milk, malt, refined sugar, sugar cubes and sugar confectionery attract 18 per cent GST, which increases the overall cost of the product making the entire ecosystem challenging and uncompetitive, he added.

"The industry demands a flat 5 per cent GST on all food processed items," the council said.