Ice-cream manufacturers demand cut in GST rate

Ice cream makers have demanded a cut on GST from 18% to 5% ahead of the Goods and Services Tax (GST) council meeting on Friday.

According to Indian Ice-cream Manufacturers’ Association (IICMA), other dairy and food products fall under 5% or 12% slab. However, ice-cream is taxed at 18%.

“Why is ice-cream treated as a luxury item while other food and dairy products fall under lower slabs?” said Rajesh Gandhi, President, IICMA during a 3-day “Ice-Cream Expo 2019” at Mahatma Mandir in Gandhinagar.

The manufacturers also mentioned that dairy farmers will benefit if GST on ice-cream is lowered.

The industry complained that ice-cream makers cannot opt for composition scheme, under which businesses are allowed pay lower tax at 1% if their turnover is less than Rs 1.5 crore.

“The government has placed ice-cream makers in the same category as pan masala and tobacco manufacturers, who are also not permitted to opt for composition scheme,” said players.

Despite the higher tax burden, the industry is bullish about achieving strong growth as ice-cream consumption in India is much lower than in many other countries. The Indian ice-cream industry is poised to grow by 17% till 2021.

Ice cream segment in India is estimated at Rs 19,500 crore, which includes turnover of unorganised players as well. It is soon to reach Rs 20,000 crore. “If we talk about top ice-cream makers in organised sector only, their cumulative turnover is Rs 9,000 crore,” added Gandhi.