Top bureaucrats have recommended the introduction of a Fat Tax under GST.
Let’s face it.
At least once in your life your increasing waistline has attracted Pammi Aunty’s “concern”. Often your mother takes up the constant comparison of your bulging belly with Sharmaji’s off-spring’s toned abs. You know your mother’s heart is in the right place (can’t say much about Pammi Aunty though). Yet there is minimal motivation to stop your hand from inching towards the bowl of chips.

What is Fat Tax?

A study reveals that the number of obese people in India has doubled in the last decade. Another study by the World Health Organization (WHO) found that about 22% children in India were obese. India stands as the third most obese country in the world. It is not a feat we can take pride in. There are discussions to impose a Fat Tax to discourage the consumption of junk food. Junk food is one of the major reasons of obesity. The term ‘junk food’ is not defined under the Food Safety and Standard Act. But, it generally refers to packaged food with low nutritional value. It includes eatables with excessive amounts of sugar, salt or saturated fats.

If you’re of the opinion that the government cannot put this appalling thought into action, you’re in for a shock. In June 2016 the Kerala government imposed a 14.5% tax on junk food served in branded restaurants. Even in USA, the states of California and Philadelphia levy tax on sugary beverages. Mexico and Hungary also have the same practice in place.

Why is Fat Tax needed?

GST Accounting, Fat Tax under GST

The intake of junk food on a regular basis has increased by folds’. 
It is the courtesy of breathtakingly delicious advertisements that adorn every possible screen. Vivid and photo-shopped posters of scrumptious burgers, mouth-watering pizzas with four diverse types of cheese, and freshly prepared french fries with peri-peri are strategically placed to garner most attraction – right from the billboards at major traffic signals to the flat LCDs and plasma. These methods work like a charm. 

Don’t try to appease yourself by thinking that Fat tax is barely a proposition. I would like to inform you that a similar recommendations to make Aadhar a money bill were adopted in 2016. So, there are strong chances that a Fat tax could be a reality under GST.

Don’t jump to the conclusion that this is another money-making scheme of the government.

The third most obese country in the world is also home to 203 million people who are underweight. Ironical, huh? So, the group of bureaucrats has suggested to divert extra revenue towards the health budget. A Fat tax would ensure that there is a control in the gobbling up of food items high in sugar, salts or saturated fats. At least this will discourage the folks who love their money. If people still consume fatty food they’ll have to pay up. The government can use this money for the betterment of the underweight population. Sounds like a win-win?
The government has also levied an additional cess (Sin tax) on demerit goods to deter people from consuming those.The team has also suggested restricting endorsements and advertisements. Another recommendation is to increase public spending on health to 1.5% of the GDP. Currently it is a meagre 1.16% of the gross domestic product. So far, there are no comments on the progress of this suggestion of introducing a Fat tax. But you never know, our PM could be in the mood for another surgical strike.
The question would then be – to eat or not to eat?
GST Return Filing Solution, Fat Tax under GST