Parle Products is witnessing some revival in demand largely because of the festive season, said a top executive of the company.
“Because of festive time we are seeing some kind of revival. I think we can vouch for revival or we can certainly say that there is a revival in demand next month when we see demand further continuing to be strong,” Mayank Shah, senior category head at Parle Products.
Talking about the tax cut, Shah said, “It’s a good cushion that has been offered by the government, but in the long-term if we are looking at a revival in demand, then probably, at least for our sector, what would make a difference would be goods and services tax (GST).”
“What would really revive the demand would be a cut in GST because that has a much bigger impact on demand and probably the pricing of the product than the corporate tax rate,” he said, adding “1/3rd of sales come from below Rs 100 per kg portfolio and balance 2/3rd comes from above Rs 100 per kg.”
Shah further said that the company was “absolutely okay paying 18 percent GST on biscuits priced above Rs 100 per kg because consumers at that end of the market do not mind paying that kind of GST”.However, he added, “Consumers that we are talking about — middle-class, lower-middle-class and probably poorest of the poor, who consume biscuits below Rs 100 per kg are not in a position to absorb that kind of GST and that’s the reason we had asked for 5 percent.”
Source- CNBC-TV18 .