Thiruvananthapuram: Two new taxes that have triggered widespread debate, ‘fat tax’ on junk food and ‘green tax’ on old vehicles, have come into force from Monday. Burgers, pizzas, tacos, doughnuts, sandwiches, butter-pattys, pasta, bread-fillings and other cooked food items sold by restaurants having a brand name or trade mark registered under the Trade Marks Act, 1999, will henceforth be charged a higher tax of 14.5 percent. Bakeries, even ones that sell such junk products, will be spared.
However, the tax is not expected to inflate the prices of many of these junk delicacies as most of these outlets have already been selling their high-calorie cheese-based products like pizzas and burgers at 14.5 percent. The government, too, expects only a modest Rs 10 crore through the increase of tax from 5 percent to 14.5 percent. The higher tax will fall only on branded restaurant outlets like Dominoes, Pizza Hut, McDonalds, Subway, SFC, KFC, Dunkin Donuts, Burger King and ChicKing.
“Some food items sold by these outlets could have been charged at 14.5 percent but there was no uniformity, and the outlets enjoyed a kind of tax flexibility, jumping from 5 to 14.5 percent according to market compulsions. This flexibility has now been taken off,” a top Tax Department official said.
The levy, which was announced in the LDF’s ‘Alteration Memoradum’, became operational with the introduction of the Kerala Finance Bill, 2016, in the Assembly on Monday. Besides the 'fat tax' on junk food, wheat and wheat products like atta, maida, sooji and rava has been brought under the tax net; from zero they will now be charged a 5 percent tax. Coconut oil and basmati rice, too, will be charged 5 percent tax.
The tax rates of all categories of goods vehicles will increase by 10 percent. Stamp Duty rates for Gift, Settlement, and Partition and Release deeds among family members will from now on be 3 percent and the ceiling fixed by the UDF government on stamp duty and registration fee has been removed.
