36
JUN 2017
FOOD FOCUS THAILAND
SURF
THE AEC
The food industry is exempted from Excise Tax and VAT it had
previouslypaid for, but theywill need topayCGST, SGST, and IGST.
Thishascreatedacomplicatedprocess forenterprises.Anycompany
that hasbusiness turn-over ofmore than2million rupeewill fall under
the tax scheme. So far, SMEs failed to copewith the sophisticationof
GSTas theyneed to register inevery Indianstateandsubmitbusiness
report onmonthly basis.
Another important issue is the abrupt cancellation of bank notes
announced onNovember 8
th
, 2016. This created alarming impact on
foodprocessing industry. It isexpected thatduring theyearendperiod,
the industry was faced with 20-35% decrease in profit. Many SMEs
are reported to be struggling with logistics, as the sector relies
excessively on cash. Retails and wholesales were greatly affected,
too,by thepolicywhichprovided themnosolution.Thedecisioncreated
chaoticsituation ineverypartof thecountry.Whatever reasonsbehind
this government’s move, the policy has caused every industry long
lasting impacts.
Consumerbehaviouralsoshift tohealthyandnutritional products.
These products aremostly imported from other countries, or at least
look like it does. Nowadays, most of the products can be found in
international markets in India. It also found that Foreign Direct
Investment (FDI) in India decreased in 2016, and start-ups were not
goingwell. Some has been closed down, and it is likely that the food
service industrywill have to strive in the time to come.
In2017, itwill bemuchharder forenterprises tosuccess, asmany
uncertainties and challenges in forms and structures of business still
exist. Technology will influence the new forms of the business in the
future, and effective use of it will be a key to business success.
Moreover, the industry will need to bemore transparent and lean to
quickly adjust to changes.
Share
ofconsumption
Spending
2013
40%
18%
22%
2%
4%
15%
Food, Beverage
&tobacco
In2011
indiancitieswith
population> 1million
indiancitieswith
population> 1million
by2030
Rent, Power&Household
expenses
other
Medical
Apparel&lifestyle
Transport&
Communication
45
68
Source: UKIBC.com
Source: UKIBC.com
