Ice cream manufacturers seek tax reduction

July 11th, 2011 - 9:31 pm ICT by IANS  

Ahmedabad, July 11 (IANS) The Indian Ice Cream Manufacturers Association (IICMA) Monday urged the government to reduce taxes on ice cream, “which is a health and happiness food, not a luxury”, to boost this industry in the country.

Rajesh Gandhi, president of the newly-formed IICMA and managing director of Vadilal industries limited said almost half of sales revenues of ice cream makers go either into taxes or in discounts.

“We have to pay 15 percent discount each to the dealer and the distributor. Besides, we pay 15 percent VAT and one per cent excise. In a product with a limited shelf-life and strict manufacturing and transportation conditions, this is a heavy burden on us,” he added insisting that ice cream is “not a luxury but a health and happiness food”.

Gandhi put the organized ice-cream industry turnover in the country at Rs.2,500 crore with a per capita consumption of around 300 milliliters, or one scoop, per annum.

“This compares poorly even with Pakistan (700 ml), China (three litres) and the developed countries (22 litres),” he said.

Gujarat incidentally consumes about 20 percent of the 35 crore litres of ice cream manufactured in India annually.

Gandhi said reduction in taxes like VAT would not only increase the manufacturers’ margins but also enable milk farmers to get a better price leading to overall growth.

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