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Soft drink makers demand elimination of SED
Leading softdrink manufacturers have asked the Govt to abolish 8% special excise duty (SED) on aerated soft drinks to help them bring down prices.
Leading softdrink manufacturers like Coca Cola and Pepsi on Friday asked the Government to abolish eight per cent special excise duty (SED) on aerated soft drinks to help them bring down prices.
Under the aegis of Indian Softdrink Manufacturers Association, cola companies submitted a memorandum to Finance Minister P Chidambaram, asking to remove the eight per cent SED so that prices of soft drinks could be brought down.
"The industry, therefore, requests that SED on aerated soft drinks be removed in Union Budget 2004 and brought on par with other food and beverage categories," it said.
Food and beverage categories other than soft drinks do not attract the eight per cent SED.
"We are convinced that excise duty reduction and its consequent impact on pricing structures will stimulate growth in the soft drink industry, which as you (Finance Minister) know is highly employment intensive and with a huge revenue potential for the Government," it said.
The Government had reduced SED by eight per cent from 16 per cent in the 2003 Budget.
Citing the case of 2003, softdrink makers said, "The revenue data of the Ministry (Finance) will support the fact that the Government achieved revenue neutrality in the summer season of 2003 despite the SED reduction in the Union Budget of 2003".
After the reduction of SED by eight per cent, the soft drink industry, through "innovative pricing, packages and distribution initiatives" has drive volume growth while passing on the benefits to consumers, it said.
"In fact, the benefit to consumers is far higher than the excise duty reduction effected by the Government of India," softdrink companies said.
Five years back, the then Government had committed to do away with SED on all items of mass consumption and the same had been implemented for all food products with the exception of aerated soft drinks, soft drink makers said.
The soft drink manufacturers' association said, quoting chairman of the task force on indirect taxes, Vijay Kelkar, that SED on products across the board should be phased out.
