Business Line

GOVERNMENT TO REDUCE TAXES TO BOOST THIS INDUSTRY.

The ice-cream consumption in India is estimated at Rs 2,500 crore in the organised sector and this industry has a fragmented market. The per capita consumption is around 300 millilitres, or one scoop, per annum which is far lower than even in Pakistan (700 ml), China (three litres) and the developed countries (22 litres), said Mr Rajesh R. Gandhi, President, IICMA, and Managing Director of Vadilal Industries Ltd.

Almost half of the sales revenues of ice-cream makers go either into taxes or in discounts. “We have to pay 15 per cent discount each to the dealer and the distributor. Besides, we pay 15 per cent VAT and one per cent excise. In a product with a limited shelf-life and strict manufacturing and transportation conditions, this is a heavy burden on us,” he added.

China and other countries do not treat ice-cream as a luxury. Reducing taxes such as VAT to four-five per cent would increase the manufacturers’ margins and milk farmers could also get better price for their products, making the industry grow, he said.

Of the 35-crore litres of ice-cream manufactured in India annually, nearly 20 per cent is consumed in Gujarat alone, Ahmedabad being the country’s ice-cream capital!

The newly-formed IICMA currently has 80 member-manufacturers in the count where nearly 200 players make ice-cream in the organised sector. With the Centre’s proposed health safety laws, the ice-cream sector is expected to undergo consolidation as unorganised manufacturers could go out of the market unless they followed stringent health and hygiene

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