Fast moving consumer goods (FMCG) major Dabur on Friday expressed disappointment on the GST Council's decision to levy 12 percent tax rate on ayurvedic medicines and products, saying it will have adverse impact on the ayurveda industry.
The move to increase tax rate on such items runs contrary to the government's efforts of promoting traditional Indian alternative medicine.
"We are disappointed with the government's decision to levy 12 per cent GSTon ayurvedic medicines and products," Dabur India Chief Financial Officer Lalit Malik said in a statement.
The Burman family-promoted 132-year-old ayurvedic company has a portfolio of over 250 herbal/ayurvedic products.
He further said that the new tax rate "will be adverse for the Ayurvedic medicines category and that too at a time when the government has been talking about promoting traditional Indian alternative medicine." According to industry sources, at present the ayurvedic medicines and products have a total tax incidence of 8-9 percent, depending on items.
When contacted for comments, yoga guru Baba Ramdev-led Patanjali, which also has been aggressively promoting ayurvedic products majorly declined to comment.
"Our team is analysing the new tax rates and will come up with a perspective soon," a Patanjali spokesperson said.
With ayurvedic products becoming popular in the FMCG segment, even Hindustan Unilever Ltd. has been preparing to enter the segment with a new range of products under 'Lever Ayush' brand.
The company has been testing products formulated with Ayurvedic ingredients in five southern states.