Amway, an MLM company, demanded the reduction in GST rate on Food Supplements urging the government that the preventives to the health problems should also be considered as important as medicines.
The company has completed 20 years of operations in the country and it is going to touch at a CAGR of 20% by the next year. Amway said it would be easy to grow much faster in India if the rules and regulation were in favour of direct selling industry.
The operations in India is about to reach sales of $1 billion by 2025-26 and possibly going beyond the turnover of Rs. 2,000 Crore by next year and 50% of its sale are based on food supplements brand Nutrilite.
Samir Behl, Amway Regional President of Europe, India & Africa said, Today GST on pharmaceuticals is 12 percent. If you strongly believe that prevention is better than cure, why should GST on supplements, which are preventive be more than double that on curative?”
In the new GST regime, the Nutrilite brand for food supplements put into the slab of 28%. He further said, “It has gone from 14 percent to 28 percent for Nutrilite and has impacted our top line.” explaining the journey of Amway in India he said, “next year we will complete 20 years…we have grown at a CAGR of 20 percent.”
In addition, he said, “We would have actually grown faster out here but the big challenge the industry faces is about lack of legislation. There is no law which governs the direct selling industry.”
William Scott Pinckney, Former Amway India MD and CEO, was arrested for the Prize Chits and Money Circulation Schemes (Banning) Act, (PCMCS). The complaint was for the illegal move of money through its way of operability.
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The company has criticized the arrest and termed as unwarranted act on paltry charges which affected in the form of a bad impression towards the company. Leaving the sour experience behind, Behl said the ministry of consumer affairs issued a guideline for the sectors and he considers it as “which is a step in the right direction”.
The company is under process to pass out Consumer Protection Act in the parliament for the betterment of the industry. Behl stated that “Once that can be converted into a law, that will make it that much stronger … I think legislation combined with a more appropriate GST will add more to the growth momentum”
While he also mentioned some direct selling industry norms and required special attention, “Once we have a legislation in place for the industry, which I feel is currently the single biggest impediment to growth, will certainly help a lot in streamlining and growing the industry faster.”
