'Differentiated tax in GST good for beverages sector'

Amid proposal to impose higher taxes on aerated drinks in the upcoming GST, beverages major Coca-Cola India says it will be beneficial for the sector if the government differentiates products within new indirect tax regime based on sugar/calorie content to promote public health.

The Atlanta-headquartered beverages giant said differentiated tax structure will be an opportunity for it to expand its products range in the country.

"Our industry is in beverages business...so to me it will be beneficial to the industry as a whole if the government in order to promote public health were to differentiate products within GST based on sugar/calorie content or other things. It should be based on science/ingredients," Coca-Cola India and South West Asia President Venkatesh Kini told PTI here.

Stating that such a step would be "a good thing", he said: "We would be very positively inclined towards any proposal that supports growth of zero/low calorie products.

"Kini said being the 'the largest juice player in the country' "if government policy supports range expansion by differentiating based on the content, then it will be great opportunity for us".

India will become like other countries in the world such as the UK, where the company sells more Coke Zero than the regular Coke, he said.

"That's fine. If the government or the consumers are moving towards lower sugar products, it's good for companies like us. I can't says about other companies but we have a range," Kini said.

Aerated drinks have been proposed to come under the demerit/luxury category under the GST rate slabs announced by the GST Council.

However, in December 2015, Coca-Cola India had said it would have to shut down some of its factories in India if the government accepted a proposal to impose 40 per cent sin tax on aerated beverages as proposed by a panel headed by Arvind Subramanian, the current Chief Economic Adviser.