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Welcome GST, But Slash Rates on Dairy Products

All dairy products should have been kept under 5 % category. Otherwise the farmers will take the hit, says Ravin Saluja, Director, Sterling Agro Industries Ltd.

Q. What is the impact of GST on dairy sector?

Ans. GST is a good reform but actually GST is not the GST. It is just name change of VAT. GST has numerous tax structures which shouldn’t be there. Whatever has been done can’t be changed back to the previous thing. The only negative part in GST is for dairy is that the government has put ghee and butter under 12% category without realizing the fact that ghee and butter are mostly consumed by the poor and middle income age group people. Rich people do not consume milk fats because of their lifestyle issues and diseases. The government authorities have overlooked the fact.

By putting butter and ghee under 12 what government has not realized that the loading of higher tax will be either put on Skim Milk Powder (SMP) or Dairy Whiteners which are of lower tax category. Some part of the 12% will go there which will eventually increase the price of dairy whiteners or SMP and of liquid milk.

Q. Do you welcome or oppose GST?

Ans. I welcome GST but not at 12% rate for dairy products. Ultimately government will realize when the farmers will be put under pressure by the private manufacturers.

Q. What is your demand before the government?

Ans. Ghee and butter or all dairy products should be under 5% category. If you want farmers to flourish, if you want consumers to have reasonably priced dairy products, if you want their dairy intake to increase, their calcium intake to increase, then you need to keep GST rates under 5 for dairy throughout either it is a niche product or the basic dairy product.

Q. Do you think that GST will impact the farmers and dairy entrepreneurs?

Ans. Of course, since the GST has been launched on July 1st and today is 5th of July. During these 5 days there has been decrease of Rs 1 per liter of milk to the farmer. Why? Because we have to sell ghee and consumer is not ready to buy and we have to lower the price. Who will take the rate? The farmer will suffer. Had it been 5%, obviously things could have been much simpler.

Q. What will be the impact of GST on Sterling Agro businesses? Are you changing the business plans?

Ans. There is no change in business plan. We welcome GST. It’s going to make life easier for everyone. Earlier we used to run behind our dealers to give this form or that form. Now the dealer has to run behind me. If they have not filed their return, they will be liable. Earlier I was being liable for their wrong doings.

 

Q. That means GST is good.

Ans. Of course it is good. It is simplified. There are initial teething factors. That happens in everything.