Goods and Services Tax Act will affect FMCG (Fast Moving Consumer Goods) distributor sector, opined experts at the National Convention of All India FMCG Foods, Telecom and Mobile Distributors held here on Sunday.
GST will affect all of 3.5 lakh product distributors across the country who supply to four crore retailers.
The convention was organised by Federation of All India Distributors’ Association (FAIDA) of Telagana, Andhra Pradesh and Twin Cities. Speaking at the meet, Keshav Ganguly, National Director of FAIDA, said in the distribution sector which has a business transparency of 96 to 98 per cent, individual distributors were still affected by the erring government taxation system. “Even now, distributors are affected by government mechanisms that are red-tape ridden. The GST Act will only worsen the system,” said Mr. Ganguly. The sector is also affected by the influx of multinational companies (MNCs), distributors opined.
Ch. Krishna, Project Chairman and Chairman (Co-Affairs) of FAIDA, said unchecked growth of MNCs in the name of development has affected the local distributors of FMCG products. Growth of MNCs should not be at the cost individual distributors who provide products to markets in both rural and urban areas.
Even Foreign Direct Investment (FDI) in the sector has affected the distributors who are still reliant on banking system for funds.
“FDI in retail distribution has to be checked.
The government should introduce measures to support individual distributors of FMCG goods to prevent monopoly of MNCs,” Mr. Krishna said.
In the convention, distributors also discussed the importance of adhering to food safety systems. The convention was attended by 1,500 delegates from across the country.
