1. Kerala fat tax limit: Humble dosa escapes price rise order

Kerala fat tax limit: Humble dosa escapes price rise order

The Subject Committee of the Assembly has specified that the tax will be effective only on burgers, pizzas, tacos, pasta, doughnuts, sandwiches, patties and bread-fillings sold in branded restaurants

By: | Thiruvananthapuram | Published: November 11, 2016 6:31 AM

Though made in a dash or two of oil, the humble dosa has crisply wriggled out of Kerala’s much-discussed fat tax. It was through a timely tinkering in the provisions of the state’s Finance Bill, passed in the Assembly earlier this week, that the popular snack found its way out of being an unaffordable menu item.

The Finance Bill, presented in the Kerala Assembly on July 14 this year, had been ominous that a fat tax of 14.5% would be slapped on all items prepared and sold in branded restaurants. This has caused swift mark-ups in the price of all pancakes, including dosa, sold in branded restaurants.

The Subject Committee of the Assembly, which met this week, has specified that the tax will be effective only on burger, pizzas, tacos, pasta, doughnuts, sandwiches, patties and bread-fillings sold in branded restaurants, thus factoring out the ubiquitous dosas.

“Dosa is often a common man’s breakfast item and a delightful draw for the foodies among tourists. It is not wise for a tourism state to tax an ethnic food item,” M Vijayakumar, chairman, KTDC, the state’s largest string of hotels, told FE.

The CPI(M)-led LDF govenment is yet to take a firm decision on reviewing the closure of 730 bars (in three-star and four-star hotels) by the previous Congress-led UDF government. This perceived image of liquor control has been sitting heavy on the revenue growth of R25,000-crore Kerala tourism. Though dosa has little economic muscle compared to the IMFL bottle, there was wide outcry over preserving its native cultural value.

Meanwhile, the Subject Committee of Kerala Assembly has also been graceful to the edible products made and sold by prisoners. Earlier, chapati made and sold by the state prison department, was the only item to escape the taxman. From this week, besides chapati, fruit juice and other beverages and sweets prepared and sold by prison outlets will be spared of tax.

As the bakery owners in the state were frowning over the mounting penalty arrears pile-up, Kerala finance minister TM Thomas Isaac has allowed a waiver of interest and penal interest on the penalty arrears. The arrears can be paid up in two years through eight instalments. The other decisions of the Subject Committee, regarding the Kerala government tax and cess, are as follows:

When apartments are sold, the right to determine the fair price would be extended to private engineers too, besides the government-recognised engineers.

The asset transactions between companies will, hereafter, call for 5% tax. The mobile phone chargers that come with the phones will have to take 14.5% tax.

The R3,500 per seat quarterly tax on inter-state buses (with pushback seats) has been trimmed to R3,000 per seat quarterly tax. The decision to demand R1,360 per sq km as quarterly tax from new city buses in Kerala has been reviewed. Instead, the quarterly tax would be just R110.

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