GST rates: Walmart says progressive, cola makers cautious

Luxury items like high-end cars and demerit goods including tobacco, pan masala and aerated drinks, will be taxed at the highest GST rate and will also attract a cess


Krish Iyer, president and CEO of Walmart India. Photo: Ramesh Pathania/Mint
Krish Iyer, president and CEO of Walmart India. Photo: Ramesh Pathania/Mint

New Delhi: Retail major Walmart on Thursday welcomed the four-tier tax structure for GST, but aerated drink makers like PepsiCo and Coca Cola were guarded in their response, saying they will wait for the details to emerge.

The GST council has approved a four-tier GST tax structure of 5, 12, 18 and 28% that aims to lower tax incidence on most goods. However, luxury items like high-end cars and demerit goods including tobacco, pan masala and aerated drinks, will be taxed at the highest rate and will also attract a cess in a way the total incidence of tax remains at almost the current level.

“With GST rates announced today, there is a good progress in this journey to have GST by April 2017. With half the CPI basket at 0% and a majority of daily consumption essential items at 5%, it will keep inflation in check. Looks good and progressive tax regime,” said Walmart India president and CEO Krish Iyer.

Beverages and snacks major PepsiCo said the food processing industry is looking forward to rational tax rates for carbonated beverages, savouries, fruit juices under the GST regime. “The GST Council discussions are going on currently and we are waiting to get more clarity—it’s too early for us to comment on the current developments,” said PepsiCo India region CFO Rajdeep Datta Gupta.

Coca-Cola India has a similar response. It said it does not have details on the applicable GST rates, including the cess, as the company manufactures and markets beverages, including juices, juice with fizz, dairy products, iced tea and carbonated beverages such as soda. “At this point, we do not know which of these products are classified in which category. It is, therefore, difficult to comment on the impact of the announced rate slabs,” said Coca-Cola India.

As for air-condition maker Daikin, the move would bring about “a positive development” for the consumer durable industry. “This is definitely a good sign and positive development for the consumer durable industry. Lower tax will also add to the growth of the overall industry and the benefits in due time will be passed on to the consumers,” said Daikin India CEO and MD Kanwal Jeet Jawa.

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