Budget 2016: Soft Drinks Will Cost More Due To Increase In Excise Duty

Your daily bottle of cola is going to cost slightly more than usual. Prices of colas is set to go up by around Rs 1-8 due to the excise duty levied on the colas increasing in the latest budget proposal released yesterday by Finance Minister Arun Jaitley. The tax on sugary aerated water will increase from 18 percent to 21 percent depending on the pack sizes. 

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Tax Hike

In the budget proposal address for 2016-17 on Monday, Arun Jaitley noted that an increase of excise duty will be levied on “water including mineral water, aerated water containing added sugar or sweetening matter.” This move comes directly after increase in sin taxes of 5% and 0.5% in the last two years. 

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Charging The Same

Although the taxes levied on carbonated based products has increased in the last two years, large beverage firms and manufacturers of carbonated drinks have not hiked the prices for its products. A senior executive speaking to Economic Times regarding tax hike, said, “We will try as much as possible not to hike prices of 200ml bottles. Even after the previous duty hikes, we tried not to pass on the cost to consumers.”