In a first ever move in India, the government of Kerala has proposed an additional taxation on fast food served in branded restaurants in the state. Proposed to be named as “Fat Tax”, the indirect tax will be levied 14.5% on the fast food meals like burgers, pizzas and pastas and others. The move was announced on Friday in the budget presented by the newly elected Left Front government in Kerala.
This is the first ever instance of any state government in India imposing tax categorised as ‘Fat Tax’ on the fast food. The tax will be over and above the bracket of other taxations and charges imposed within the Maximum Retail Price.
The CPI (M)-led Kerala government is targeting additional revenue to the tune of Rs 10 crore with its proposal of imposing 14.5 per cent Fat Tax on burgers, pizzas and pastas served in branded restaurants.
A ‘Fat Tax’ is a tax or surcharge that is placed upon fattening food, beverages or on overweight individuals, describes a popular internet encyclopaedia. A fat tax aims to discourage unhealthy diets and offset the economic costs of obesity, the online encyclopaedia adds further.
This category of tax was implemented in just two countries – Japan and Denmark to address their alarming obesity problem and keeping the spread of diseases like diabetes and strokes in check. While the tax is prevalent in Japan, it was abolished by Denmark an year after its introduction in 2011.
The indirect taxation measure has, however, gained traction among several other countries with their governments studying the issue further.
The move, first ever in India, will certainly stir a debate as the price of snacks, popular especially among children and teenagers is set to go up. But there are equally good chances that the move might price out a praise for itself.