GST created hiccups, noteban has disrupted wholesale channels: ITC
Diversified conglomerate ITC Limited on Saturday said that while demonetisation had "disrupted" the wholesale trade channels, implementation of GST had created some hiccups in transition, but becoming better every week. "There had been some hiccups after the implementation of GST, but is becoming better every week. The wholesale channel is taking time while the retail channel is less affected. But disruptions are far less lower than expected", CEO of ITC Sanjiv Puri told after the company's AGM here.
Puri said that while GST was supposed to be revenue neutral, the dual tax rates on certain FMCG categories like atta had created some anomalies. "Taxation rates on unbranded and branded product categories like atta had led to creation of anomalies. There should have been a standard rate to promote the processed food industry which could have created more jobs". he said. Asked to comment on impact of different GST rates on the entire FMCG portfolio of ITC, Puri said "the impact had been more or less even. While taxes on soaps are low, it is high on shampoos". On the whole, Puri said ITC's overall FMCG portfolio had seen robust growth and grew faster than the industry, reports PTI. ITC was building on segments in the FMCG space where not present now. Chairman of ITC Y C Deveshwar said "anomalies are there and not economically ideal". The purpose of GST was not have multiple rates, adding that eventually it would become a single rat, he said. "Our target is to reach a turnover of Rs one lakh crore by 2030. We will be looking towards to enter at all possible FMCG categories", Deveshwar said. Expressing concern over the taxation on cigarettes, Puri said "It is a major cause for worry". There had been 202 per cent rise in tax which had led to smuggling of cigarettes and shift towards other forms of tobacco consumption. Puri said that after the excise imposition in the budget, there had been successive bouts of taxation on the legal cigarette industry which comprise 11 per cent of total cigarette consumption. "68 per cent of cigarette sold escape regulatory oversight", he said. "With increase in taxation, the legal cigarette industry is being put under pressure", he said.