The Government’s decision to reduce the GST slab has been welcomed by industry leaders. They said that the move could provide a significant boost to sugar consumption and related sectors.
Atul Chaturvedi, Executive Chairman, Shree Renuka Sugars, said, “ The GST slab reduction is likely to positively impact the refined sugar, confectionery, bakery and chocolate sectors, which can lead to a surge in demand and an overall ‘feel-good’ sentiment. This should improve offtake in these categories”.
On a 40% GST slab for carbonated beverages, Chaturvedi clarified that the 12% cess has been subsumed with the earlier 28% GST, making it 40%, so there is no effective change on that front. He reiterated that, “Overall, for the FMCG sector, these adjustments are expected to potentially improve demand as explained earlier. This is positive news for the sugar industry”.
Prakash Naiknavare, Managing Director (MD) of the National Federation of Co-operative Sugar Factories, echoed a similar sentiment. He said, “GST reforms bring great news for the sugar industry. With confectionery and bakery GST reducing from 18% to 5%, I think there will be more money in the hands of the consumer. This will increase sugar demand”.
Rahil Shaikh, MD, MEIR Commodities, said, “I think this should have a positive impact on the demand for FMCG products which use sugar. We have seen a slight dip in the overall sugar despatch number given by the Government for the current year; there should be some reversal on that front. I feel for 2025-26 SS, we can expect sugar consumption at 29 MMT, this is a position I am holding even before the GST news came in. Overall, I feel the development should have a bullish impact on the demand for sugar and the industry”.
However, Shaikh made an observation regarding the whole sugar and health debate. He said, “There is one ongoing issue regarding the health factor; I would say we need to assess how much it will continue to influence sugar demand in the long term. In the short term, people don’t change their eating habits overnight, so the impact is limited”.
GST rates on refined sugar containing added flavouring or colouring matter, sugar cubes (other than those which attract 5% or nil GST), sugar boiled confectionery has been slashed from 12% to 5%.
GST rates on other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid form; sugar syrups not containing added flavouring or colouring matter; artificial honey, whether or not mixed with natural honey; caramel, sugar confectionery has been slashed from 18% to 5%.
GST rates on jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes, obtained by cooking, whether or not containing added sugar or other sweetening matter revised from 12% to 5%.
