With bakeries still under the 18% Goods and Sales Tax bracket, bakers say that sale of cakes has been badly affected this year.
The biggest season for cakes and pastries, which is during Christmas and New Year, is not what it used to be and bulk orders have come down too, they say.
V. Manoharan, vice-president, Indian Bakers Federation, said despite a 20% increase in overheads, they were not able to hike rates as after GST, they have had a drop of 30% in sales. “Till last year, we were paying 5% VAT but, this year, GST is 18% and a cake that sold for ₹500 is now ₹590. Many customers question us on the increase. They don’t realise we can’t cut GST,” he said.
Standalone bakeries are the worst affected as they have not got many orders for cakes from even regular customers this year. C.N.R. Selvaraj of Master Cakez said that bulk orders from companies did not come since customers were opting for lower priced options rather than pay high GST. “Some customers ask us why they should pay tax for sandwich when bread did not have any GST. Home bakers too are eating into our business,” he added.
Bakers demand that they be treated on a par with restaurants that have 5% GST. P.P. Subramanian, honorary treasurer, Tamil Nadu Bakers Federation, said 40% of food items, including starters and desserts in restaurants, were bakery products.
Mr. Manoharan said that so far several representations had been submitted to both the State and Central governments but to no avail. There were around 20,000 bakeries and lakhs of employees were dependent on the industry, he said, adding that many bakeries were closing down.
To save the industry, the government must act, he said.
