Excise duty hike on carbonated drinks likely to make them costlier

aThe hike in excise duty could not have come at a worse time for the Rs 11,000-crore soft-drinks industry. Right at the onset of the summer season, prices of carbonated drinks are likely to go up making it a not-so-cool summer for consumers as well as companies.

“The proposed hike of 2% on the standard rate of excise duty and service tax comes at a time when the packaged beverage industry is starting to gain momentum. The soft drinks industry will weigh its options in the light of this proposed hike, but given the rising input and transportation costs, we will need to pass on a part of this increase to consumers ,” said a Coca-Cola spokesperson.

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A spokesperson for Pepsi-Co India said the Budget announcement will be reviewed and a decision on the price hike will be taken soon, although no immediate change in price is expected.

Most of the manufacturing facilities for both Coca-Cola and Pepsi-Co are outside of excise free zones. The price hikes are likely to be passed on in larger packs while the entry-level packs may not be affected.