Added on : 2019-08-21 15:18:15
Biscuit maker Parle Products Private Limited on Tuesday said it may lay off almost 10,000 employees if the demand slowdown continues.
“We have sought reduction in the Goods and Services Tax on biscuits priced at Rs 100 per kg or below, which are typically sold in packs of Rs 5 and below, but if the government does not provide that stimulus, then we have no choice but to let go of 8,000 to 10,000 people from our workforce across factories as slowing sales are severely impacting us,” said Parle Products category head Mayank Shah.
The company said 12% tax was imposed on biscuits that cost Rs 100 per kg before GST was introduced. It expected the GST rate to be fixed at the same rate for premium biscuits and at 5% for biscuits priced lower. However, all biscuits came under the 18% GST tax bracket, forcing companies to increase prices. This had a direct impact on sales, Shah said.
Parle increased its prices by around 5%, which resulted in a significant decline in sales. The company has around one lakh employees in 10 plants and 125 third-party manufacturing units. More than half of the company’s sales come from rural markets.