The first-of-its-kind ‘fat tax’ introduced in Kerala faces the test of withstanding the Goods and Services Tax even before it delivers on helping people “live a healthy life”. The possibility of GST becoming a reality is getting brighter with ministers Arun Jaitley and M Venkaiah Naidu making last-ditch effort to get the Bill passed in the monsoon session of Parliament.

The debate on how fat taxes are to be handled in GST could come in handy for Congress which has been searching for innovative reasons to stall the much-awaited reforms.

For starters, the Kerala government levied a tax of 14.5 per cent on fat-filled fast foods such as burgers, pizzas, doughnuts, sandwiches and pasta sold through branded restaurants to promote healthy living. Multinational brands such as McDonalds, Dominos and Pizza Hut have more reason to worry if the tax is replicated in other States.

According to industry estimates, over 120 million branded pizzas are sold annually in India.

The decision to let out many fat-rich food products such as sugar-sweetened beverages, mithais and traditional savouries from the tax hook reflects Kerala’s communist government antipathy to delicacies with an American flavour. It is a fact that 100 grams of a margarita pizza contains 218 calories while 100 grams of coconut, which is the lifeline of a Keralite, has 354 calories.

If not for the half-hearted measure, the Kerala government could have raked in the moolah by levying the tax scientifically covering more products based on their calorific content.

Other State governments could have looked up to God’s own country and latched on to the fat tax to shore up their revenue. While the new tax could take months to cut people’s calories, it can instantly mend the financial health of governments, provided, of course, it can somehow be worked into the GST framework.

Senior Assistant Editor

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