The body has urged the finance minister to place carbonated beverages under the 18 per cent GST slab to support small traders
Highlighting that simplifying goods and services tax (GST) and rationalising tax slabs is an opportunity to strengthen India’s domestic trade ecosystem, the Confederation of All India Traders (Cait) has urged the government to reclassify carbonated beverages into the 18 per cent slab to aid small traders.
In a communication sent to Union Finance Minister Nirmala Sitharaman, Cait National President BC Bhartia, in his letter, said that at a time when the GST tax system is being overhauled, it is necessary that on the one side, the tax slabs are redefined, whereas the burden of multiple compliance should be the prime object of reforms.
Citing a Cait-commissioned study with Hansa Research, Bhartia highlighted that beverages alone account for nearly 30 per cent of sales volumes for small kirana stores. However, the current higher tax incidence on carbonated beverages has constrained liquidity and reduced earnings potential for small sellers, despite these products being among the highest turnover items.
“Beverages are mass-consumption items sold primarily by small traders who work on very narrow margins. Rationalising GST on this category would ease their operating pressures, improve their earnings, and accelerate formalisation of the sector, where more than 80 per cent still remains unorganised,” said Bhartia.
Cait noted that global average tax rates on beverages stand between 16 to 18 per cent, and a calibrated shift of carbonated beverages to the 18 per cent GST slab would align India with global practice while boosting domestic formalisation. The statement added that fiscal analysis suggests such a move would be both socially equitable and revenue-positive for the government over the medium term.
