‘The govt has been re­spon­sive to GST’

Business Standard - - COMPANIES -

As the man­ag­ing di­rec­tor of food ma­jor Bri­tan­nia In­dus­tries, VARUN BERRY says the goods and ser­vices tax (GST) rate of 18 per cent on bis­cuits, its key cat­e­gory, is tax-neu­tral. He says in an in­ter­view to Viveat Su­san

Pinto that the govern­ment is mak­ing ef­forts to smoothen the GST process and the pain points will even­tu­ally ease. Edited ex­cerpts:

Bri­tan­nia re­ported an early six per­cent vol­ume growth for the Septem­ber quar­ter in a pe­riod that saw G ST com­ing into force. This also came af­ter three quar­ters of flat vol­ume growth for the com­pany. Your views.

The way the (Septem­ber) quar­ter panned out, the first month (July) was al­most flat be­cause de­stock­ing (due to GST) con­tin­ued. The sec­ond and third months, how­ever, saw vol­ume growth pick up. Of course, un­der six per cent of vol­ume growth for the Septem­ber quar­ter is a re­fresh­ing change from what we’ve been see­ing. That it came in a pe­riod that saw a shift in the tax regime is a big plus.

Do you see vol­ume growth im­prov­ing in the forth­com­ing quar­ters?

It should. We have not taken price hikes be­cause the 18 per cent GST on bis­cuits is tax-neu­tral. This cou­pled with the sta­ble en­vi­ron­ment on the com­mod­ity front en­sured we did not need to in­crease prod­uct prices for a few quar­ters now. While in­fla­tion­ary pres­sures are grow­ing es­pe­cially on the crude front, I don’t think we will raise prices for the next six months.

While the rate re­duc­tion an­nounced last week does not di­rectly af­fect you, are you happy with the ef­fort the govern­ment is putting into ease the pain of in­dus­try?

The govern­ment is do­ing a lot of good work to make sure that the GST process is smooth. While we still have some dis­tance to go on that front, de­lay­ing GST would not have helped ei­ther. So the ear­lier it was rolled-out, the bet­ter. At the same time, the govern­ment is re­spon­sive to clear­ing the G ST hitches and glitches. That is a good sign.

There is a view that the rate re­duc­tion on cho­co­lates from 28 per­cent to 18 per cent an­nounced last week could aid growth of that cat­e­gory, hurt­ing bis­cuits. Is this a con­cern fac­tor for you?

With the GST rate com­ing down for cer­tain food cat­e­gories, this could be dis­ad­van­ta­geous to bis­cuits be­cause those play­ers may slash prices mak­ing it en­tic­ing to the con­sumer. This is a com­pet­i­tive ad­van­tage for these cat­e­gories. We would have to wait and watch to see how the sce­nario evolves.

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