Guwahati: The Federation of Beverage Manufacturers Association (FBMA) and the Tamil Nadu Food Grains Merchants Association have urged the finance ministry to save the beverage industry and its dependent farmers and allied industries by keeping at bay the recently hiked GST on the beverage industry.

The FBMA stated in a press release that the association, along with a group of Lok Sabha and Rajya Sabha MPs, has written to the Union Finance Minister Nirmala Sitharaman seeking withdrawal of the steep hike on the beverages industry.

"The announcement by the GST Council of the (hiked) tax rate for domestically produced soft drinks on par with d multinational soft drinks has 41 come as a shock to domestic 18 soft drink manufacturers, the release stated.

The 45th GST Council meeting was held in Patna on September 17 last, where it was announced that the tax on carbonated soft drinks with fruit juice would be increased from 12 percent to 28 percent and the cess tax would be increased from 12 percent total 40 percent.

The GST notification was both "disappointing and distressing the FBMA said and added that the present changes in the GST rate will increase the product cost by 30% which will definitely have an adverse impact on the sales, which ultimately would make the industry sick.

"The 'steep tax hike will greatly cripple the beverages sector as the cost of raw material, such as fruits, pulp. fuel, packing materials, and transport continue to the day by day and they have already been struggling hard to bring their business back on track, which was badly hit by the Covid-19 lockdown. Nearly 5 million workers are employed in the beverages industry in our country will affect," it said.

MSME units engaged in the beverages sector are slightly recovering by availing additional loans under the emergency credit assistance scheme of banks. The 40% tax increase will affect the beverage industry, especially the MSME units, and it will become a "non-performing asset", stated the press release issued by FBMA vice president Vijaykumar.

The Finance Minister should immediately intervene in this matter to protect the manufacturers of beverages made from juices of local farmers. Only the federal government can revise the tax rate on soft drinks to the old level of 12%, the press release stated.