The government has provided excise relief to ice-creams by increasing the abatement on maximum retail price of ice-creams from 40 to 45 per cent.
The move, already notified by the finance ministry, will bring down the excise payable on ice-creams, which is levied at 16 per cent.
As a result, for an ice cream having a maximum retail price of Rs 10, the excise payable will be calculated on Rs 5.5 instead of Rs 6 as was the case earlier.
Ice-cream manufacturers, however, are yet to calculate the across-the-board benefit of the move.
"Although across-the-board benefit cannot be calculated, increase in abatement price means excise will now be have to paid on 55 per cent of the maximum retail price of ice-cream products, which was 60 per cent earlier," said a senior executive of a Delhi-based ice-cream manufacturing company.
Meanwhile, some ice-cream companies have objected to a proposal by the health ministry to amend the Prevention of Food Adulteration Act (PFA), 1955, by substituting the term "frozen dessert" with "vegetable fat-based ice-cream" or "non-dairy ice-cream".
The PFA rules specify that ice-creams should contain not less than 10 per cent milk fat and 3.5 per cent protein.
In a letter to the director-general (PFA), ministry of health, Lalit Nirula, managing director of Nirulas Corner House Ltd, has said, "We strongly disagree with this proposal since this will make customers feel that they are getting a dairy product which they are not actually getting."
The letter further states, "We do not see how a product, which does not have any milk-based ingredient, could be called `ice-cream'. While it could be called ice ghee, ice mellorine or ice vegetable fat, it cannot be called ice-cream since it would be mis-branding the product."
Nirula also pointed out that even in the US, the largest ice-cream market in the world, there was a clear differentiation between ice-cream and non-dairy frozen desserts which were usually mellorine products.
In another letter to the secretary of the health ministry, the Indian Dairy Association said changes in the PFA standards were welcome "as long as it does not misrepresent any existing milk product".
