- 19 Jul 2022
- ICICIdirect Research
PRICES OF PRE-PACKAGED CERELS, PULSES, FLOURS TO RISE 5-8%
News: Prices of daily essentials such as pre-packaged cereals, pulses and flour weighing up to 25 kg, dairy products such as curd, buttermilk and paneer, and beverages sold in tetra paks could rise 5-8%. The GST Council has brought over a dozen pre-packaged (up to 25 kg) foods ranging from dairy products such as curd and buttermilk, to foodgrains and staples like pulses, rice, oats, barley, natural honey and jaggery, which were exempted earlier, under the 5% slab. Tetra paks, used to package liquid beverages and dairy products, will be taxed at 18% instead of 12% previously.
Views: The GST on pre-packed products up to 25 kg is likely to bring parity on taxes with branded products, which could result in consumption shift from unbranded to branded products. However, loose grains & cereals are still exempt from GST. Further, dairy companies with tetra paks for liquid beverages and curd are increasing their prices to pass on the impact of GST increase from 12% to 18%.
Impact: Neutral