Expect consumption growth in coming qtrs if GST reduced, will pass on benefits to consumers: Britannia

Bengaluru: Leading food company Britannia on Tuesday said a possible reduction of tax on food products under the proposed GST reforms could help increase consumption in the coming quarters and the company will extend benefits to consumers.

Terming the rationalisation of GST and a good monsoon this year as "positive indicators", Britannia Executive Vice-Chairman, Managing Director and CEO Varun Berry said he expects the demand situation to become "better and much stronger" in the coming quarters.

When asked whether the GST reduction would augur consumption, Berry said, "Definitely", as the food items are expected to move to 5 per cent and "positively impact" the consumption.

On being asked whether Britannia will pass on the benefits to consumers, Berry said: "Yes! Of course."

"It will take at least one and a half months for consumers to get this benefit," he said.

According to Berry, biscuits are the cheapest form of food, which anyone can buy and are available everywhere from urban markets to lower strata villages with a population of less than 3,000 people.

"So, certainly it's going to (positively) impact consumption, although penetration is 100%, but the amount which people are going to consume is going to be enhanced," he said.

Under the current GST regime, biscuits are under the 18 per cent tax slab. However, all food products, including biscuits, are proposed to be placed under 5 per cent in the proposed new GST regime.

The meeting of the GST Council, chaired by the Union Finance Minister and comprising ministers from all states and UTs, will be held on September 3 and 4 to discuss reforms proposed by the Centre that mooted most goods be charged at either 5 per cent or 18 per cent.