Coca-Cola Might Stop Its Production In India

Coca-Cola might stop open its happiness in India if the government accepts the 40% tax to on aerated drinks which is proposed by the committee of the goods and services tax, governed by Cheif Economic Advisor Arvind Subramanian.

At present the softdrink makers pay an excise duty of 18%. “We run 56 factories across India. If the proposal comes into effect, we will have to shut factories in India,” Venkatesh Kini, president, Coca-Cola India and South West Asia.
Coca-Cola might stop its production in India
“Any step in this direction will lead to several challenges for our business and do a lot of damage to us, our 30 lakh retailers, thousands of distributors and bottlers. Because this is GST, it will have a ripple effect and hurt the entire ecosystem,” he said.

The GST bill, if passed by the Parliament, will replace a number of state sales taxes. The Narendra Modi government is facing strong opposition in the Rajya Sabha to pass the bill.

“We followed the government’s decision to increase taxes last year, which forced us to pass the tax increase to consumers. The price of a soft drink bottle increased from Rs 10 to Rs 12. The immediate impact was a (double-digit) decline in demand. Hence, the proposal to apply a 40% tax is unthinkable,” Kini said.