The government has said tax incidence on sugar, tea, coffee and milk powder will be lower under the goods and services tax (GST) regime. “Proposed GST rates would be much lesser than the prevailing incidence of taxes in case of sugar, tea and coffee other than instant coffee) and milk powder,” an official statement said. Giving details of the existing taxation structure and GST, it said sugar attracts specific central excise duty of Rs. 71 per quintal plus sugar cess of Rs. 124 per quintal, which translates to ad valorem rate of more than 6%. The present total tax incidence including incidence on account of account of central sales tax, octroi, and entry tax would work out to more than 8% as against the proposed GST of 5%, which is 3% less than now. In the case of tea and coffee (other than instant coffee), both the commodities attract nil central excise duty and VAT rate of 5%. Considering embedded taxes in production of tea and coffee and the incidence on account of CST, octroi and entry tax the present total tax incidence works out to more than 7%. As against this, the proposed GST rate for tea and coffee (other than instant coffee) is only 5%, it said. Milk powder attracts nil central excise duty and 5% VAT now, it said adding that considering embedded taxes in production of milk powder and the incidence on account of CST, octroi, and entry tax, the present total tax incidence works out to more than 7%. As against this, the proposed GST rate on milk powder is only 5%, it said.