Mumbai, Sept. 2 -- Industry bodies including the Indian Beverage Association (IBA) as well as the Confederation of All India Traders (CAIT), a body that represents more than 80 million traders and 40,000 trade associations, have appealed to the finance ministry to reduce the tax on carbonated beverages citing the strain it puts on on small businesses, which operate with limited margins and working capital.

Currently, a tax of 40% (28% GST plus 12% compensation cess) is levied on aerated drinks. In a communication sent to the finance minister on Tuesday ahead of the GST Council meeting, the IBA requested a GST rate reduction on carbonated beverages to 18% and for such products to be declassified as 'sin or demerit' goods.

India is set to...