Global soft drinks major Coca-Cola said on Friday that it might be forced to close some bottling plants if a proposed 40 %" sin" tax on aerated drinks is passed by the centre.
A committee headed by Chief Economic Adviser Arvind Subramanian has proposed a 40 % GST tax rate on aerated beverages along with tobacco and luxury cars.
Coca-Cola which runs more than 50 plants and directly employs more than 25, 000 people in the country made a statement saying, “An acceptance of the Arvind Subramanian committee recommendations with regard to GST rate of 40 per cent on aerated beverages will have a negative ripple effect on the entire beverage ecosystem, thereby, affecting lakhs of retailers, thousands of distributors, transporters, cold drink equipment manufacturers, farmers and producers of raw materials for the beverage industry and the entire forward and backward supply chain systems."
The company added, "It will lead to a sharp decline in consumer purchase, In these circumstances, we will have no option but to consider shutting down certain factories."
Currently the GST bill is to be tabled in both the Houses of the parliament and was due to be passed by April 2016. However, with the current logjam created by the Congress due to the National Herald case, the bill is likely to miss the deadline.