Just like TN, K’taka hoteliers, bakers demand uniform tax rate on food

NT Bengaluru: After a controversy erupted over the Goods and Service Tax (GST) imposed on cream buns in neighbouring state Tamil Nadu, hoteliers and economists in the city echo the same concern - the need to rationalise GST slabs for food items under a single category. On September 11, D Srinivasan, Managing Director of Coimbatorebased Annapoorna Hotels, expressed his concern over the imposition of different tax rates on each food item. His remark on the tax differences between a bun and a cream bun attracted several mirthful comments with even Finance Minister Nirmala Sitharaman remarking on it. Bakers and hoteliers here have expressed similar doubts about the tax slabs.

A baker in VV Puram, who preferred anonymity, admitted that there was confusion on generating bills on different savouries and sweets. While charging 12 per cent GST on a cream bun, the baker claimed that GST is imposed on just the bun. “Some bakers impose tax on the product. We sell the product for a price which also includes the GST,” he claimed. However, the baker seemed visibly confused while generating the bill on his system. Honorary President of Bangalore Hotels Association (BHA) PC Rao was also concerned over the confusion faced by customers and restaurants while billing food items. “If GST slabs are regularised for food, it may help in the ease of doing business,” he added.

Many small bakeries claim that they don’t charge GST on their products. The proprietor of Hassan Iyengar Bakery near South End Circle said they pay GST on a composite basis. This means that only one percent of their turnover will be taxed. The manager of a prominent bakery in East Bengaluru claimed that the five per cent GST on bread and bun is paid from their pockets. “We don’t impose it on our customers,” claimed the manager.

GST on food items haven’t evolved scientifically: Economist Professor Krishnaraj from Institute of Social and Economic Change (ISEC) explained how different GST slabs contribute to food inflation. “GST on food should be levied keeping in mind the distributive justice involved. However, the tax regime has contributed to food inflation, which has negatively affected people’s welfare,” he said.