Gujarat considering Kerala-like ‘fat tax’


Gandhinagar: The Gujarat government is considering emulating the Kerala government’s move to impose a 14.5% ‘fat tax’ on burgers, pizzas and other junk food sold in restaurants chains, to raise more money for preventive healthcare measures.

The Gujarat government is considering various possibilities. As the goods and services tax (GST) may be implemented in the next financial year (April 2017), and is vastly different from the present VAT (value added tax) regime, the government must look at all possibilities to prepare the ground for imposing the `fat tax’ from the next financial year.
A key source in the state finance department said: “A fat tax on junk food is levied in many European countries, such as Denmark and Hungary, to deter people from choosing harmful junk food and to generate money for preventive healthcare.

This idea can also be adopted in the state, as we also have high consumption of junk and unhealthy food. The `fat tax’ can be used as a tool to raise awareness of the harmful effects of junk food. The government will study Kerala’s and other models and decide whether or not to levy this in the next budget. GST will likely come into force next year, so we may have to have a special provision for the `fat tax’. It is possible under the current tax structure. We will examine all these aspects soon.”

Organized fast food chains and trade and industry bodies have objected the proposed `fat tax’ in Kerala and are likely to do so in Gujarat. The Gujarat government’s resolve in imposing it remains to be seen.
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