...reforms to encourage virtuous cycle of Eco growth

New Delhi: The food processing sector has been a major beneficiary in the rationalisation of tax rates with most products witnessing a decline to 5 per cent GST slab, encouraging a virtuous cycle of economic growth, the government said on Monday.

The simplified tax structure brings uniformity across food items with reduced number of tax slabs. A stable tax environment will help businesses plan long-term investments, encourage compliance, and drive economic growth. The consumers will witness overall reduced food prices, making staples more affordable. This, in turn, stimulates consumer demands, FMCG and packaged food businesses are expected to see an uptick in sales. Additionally, the simplification aids businesses by reducing compliance costs and lowering litigation risk, said the Ministry of Food Processing Industries. The new structure helps correct inverted duty cases -- when inputs were taxed higher than finished products.