May have to shut some factories if GST is passed: Coca Cola India

The Indian subsidiary of Coca-Cola Co said on Friday it may have to close some bottling plants if the government pushes through a proposal that would subject fizzy drinks to what they’re calling a 40 percent "sin" tax.

The beverage maker, which operates 57 factories and bottling plants across India, said a proposal to group sugary sodas with higher-taxed luxury cars and tobacco would hurt demand for its drinks.

"It will lead to a sharp decline in consumer purchase," Coca-Cola India said in a statement. "In these circumstances, we will have no option but to consider shutting down certain factories."

India's ruling party is trying to push a national goods and services tax (GST) through parliament that would replace a myriad of state sales taxes and shake-up government revenue.

A government-appointed panel examining GST has suggested a standard rate of 17 percent to 18 percent, and and a higher tax of 40 percent on some goods including the carbonated drinks Coca-Cola sells.

Image credit: Indiatimes