At the outset I congratulate you on your unprecedented victory and assuming assuming the office of the Hon’ble Chief Minister of Uttar Pradesh. I am sure that the State Govt, under your dynamic leadership, would leave no stone unturned to ensure the economic development of Uttar Pradesh and its people.
On behalf of the Biscuit industry, especially the Small & Medium segment, I would like to place on record our whole hearted support to your goodself and the State Govt for the cause of overall progress, peace and development.
We in IBMA also welcome the decision of the Stat Govt to introduce Value Added Tax(VAT).
In this connection, we give herein-below few points in support of our appeal to fix Value Added Tax on Biscuit at 4% for your kind consideration:-
- Biscuit is a nutritious snack food hygienically processed & packaged, available at a very reasonable prices and consumed by the low income group and economically weaker sections of our society.
- Biscuit is a part of the food processing industry, recognized as a thrust area by the Govt of India as well State Governments for encouragement to grow so that it is abundantly available at lower prices to the common man.
- Biscuit, being an agro based food product, is manufactured mainly using agri products, i.e. Wheat, Vegetable Oil, Sugar, Milk etc. and therefore growth of production and consumption of Biscuit would benefit the farmers of these agri products. However, sharp increase in the prices of Wheat/Maida, Veg.Oil ,Sugar etc has already caused immense hike in our cost of production and marketing.
- In addition to Value Added Tax, biscuit is also subjected various other local levies. i.e. Purchase Tax, Entry Tax/Octroi etc as also taxes/duties /cess etc on our ingredients, inputs, packaging material, equipment etc.
- As regards Value Added Tax is concerned, the State of Tamil Nadu which has recently introduced VAT, has fixed rate of 4% on Biscuits. Similarly Assam is also levying VAT @ 4% on Biscuits. Other State Governments are also favorably considering our representation for fixing 4% VAT on biscuit.
- Biscuit manufacturers and trading community in predominantly consist of Small Scale & Medium Units. Biscuit production and marketing process is highly labour oriented. Biscuit industry in the country, directly and indirectly employ more than 15 lakh workers, in addition to thousands of workers employed in distribution and retail network in Uttar Pradesh and therefore, deserves sympathetic consideration by the State Government, with regard to levy of Value Added Tax at the minimum rate of 4%.
- Biscuit is a highly competitive high volume based food product with very thin margins of profit and therefore, SSI & Medium manufacturers and traders of biscuit are already facing stiff competition, making it very difficult for them to survive.
- In the event of the State Govt agreeing to our request to levy of VAT on Biscuit @ 4%, consumption of biscuit in the State would increase at least by 20% and hence the impact on revenue would be adequately compensated. On the other hand, prices of biscuit would come down benefiting the consumers, who are mainly from the economically weaker sections of the society.
Under the circumstances, I would request your goodself to kindly consider our plea favorably and issue necessary orders to fix the rate of Value Added Tax on Biscuit @ 4% in Uttar Pradesh at the time introduction of VAT in our State.
In this connection, I along with one or two colleagues in IBMA would like to personally call on your goodself, as per your convenience and shall be grateful for your kindly indicating a convenient date and time.
With kind regards,
Yours sincerely
K P Mohandas
Secretary General |
