Union Budget 2024 | A reform that prioritises nutritional value over broad categorisations in the GST system is imperative, says TeaFit founder Jyoti Bharadwaj

Finance Minister Nirmala Sitharaman will present the Union Budget on July 23 after presenting an interim budget ahead of the Lok Sabha elections.

Finance Minister Nirmala Sitharaman presented the provisional budget on February 1, 2024. Ahead of the presentation of the Union Budget 2024, news emerged that Prime Minister Narendra Modi may struggle to meet the wishes of his alliance partners JD(U) chief Nitish Kumar and TDP chief Chandrababu Naidu this time. However, it is more likely that the budget will be a feel-good budget riding on the record dividend of Rs 211 lakh crore from the RBI to the Union government.

“Companies seeking to produce healthy beverages face significant challenges under the ongoing GST. The different tax rates are putting pressure on margins: fruit-based beverages are subject to a modest 12 percent GST despite the potential misuse of this classification by sugary or concentrated variants, while carbonated beverages are subject to a whopping 40 percent tax (28 percent GST and 12 percent cess) regardless of their health profile. This discourages the search for innovative, truly healthy beverages and inadvertently encourages the proliferation of fruit-based or sugary alternatives,” said Jyoti Bharadwaj, Founder, TeaFit.

“Unlike progressive tax systems in countries like Singapore and the UK, which impose taxes based on sugar content to encourage healthier food choices, our rigid tax structure hinders the adoption of healthier carbonated alternatives by imposing uniform taxes. A reform that prioritizes nutritional value over broad categorizations within the GST system is imperative. Such a reform would empower companies to advance their mission of promoting public health through innovative, low-sugar beverages. By tailoring tax incentives to consumer preferences and global health trends, this approach not only supports industry innovation but also facilitates a market shift towards truly health-conscious products,” she added.