The Minister of Finance has taken the fizz out of the Indian Beverage Industry, while his budget proposal of increasing excise duty on aerated drinks with added sugar like Coke, Pepsi initially have been targeted but it seems that this increase would further apply to even the sports drinks and other flavored drinks with sugar or sweeteners. The overall increase in the excise duty on aerated products has been 5% which would have a deep- reaching impact on the beverage industry.
Further, he has also targeted has targeted cigarettes to earn more revenue, proposing to increase the specific excise duty on cigarettes in the range of 11% to 72%. The maximum increase will be in the prices of smaller-sized cigarettes which fall in the highest excise slab. The beverage industry players players added that they are shocked by this retrograde proposal of the increase in the excise duty by 5% but on the contrary industry expert further commented that this would not have a much impact as the coke bottle of Rs. 10 would cost only 50 paisa more and would not effect the sales much.
But the impact on the sale of cigarettes will be much more and it is also a bad news for pan masala manufacturers and tobacco manufacturers.
