Eveready appeals to govt to reduce GST rate on flashlights
Kolkata: Eveready Industries Ltd has asked the government to reduce tax rate on flashlights from the proposed 28% by at least 10 percentage points under goods and services tax (GST). Currently, the tax rate on them is 18%. This, it said, will be in line with the government’s support for LED devices.
Amritanshu Khaitan, Eveready managing director said LED flashlights are commonly used in Indian households across socio-economic segments.
Whatever rate is eventually determined, the company will take steps to protect margin, Khaitan had said in a conference call with analysts on Wednesday. The change in rate for batteries would have little or no impact, he said.
Eveready claims to have a 70% share of the flashlights market. Its market share in the dry cell batteries market is estimated at around 50%.
Flashlights are estimated to have contributed about 15% of Eveready’s revenue of Rs1,355.2 crore, while batteries accounted for 55%, according to broking firm Asit C. Mehta Investment Intermediates Ltd. Margin from flashlights is estimated at 13-14% and that from batteries at 14-15%. Revenue from the two products is expected to grow at 1-2.6% in the current fiscal year, it said in a research report.
GST will ensure better tax compliance and thwart Eveready’s competitors from the unorganised sector, the broking firm said. The new tax regime will narrow the gap between Eveready’s prices and those of others, but not eliminate it, the report added.