Tax on Rosogolla, mishti doi: GST injects bitterness into popular Bengali sweets
Walk into any sweet outlet in Kolkata and the dominant discussion is between customers and cashier trying to work out the GST rates that have been levied on all the dozens of items that are on displayed.business Updated: Jul 06, 2017 12:34 IST
Rosogolla and sandesh, misti doi and pantua -- sweets that represent the soul of Bengal -- have turned a tad bitter since July 1 with makers busy negotiating the maze of GST rates on the sweets, so far left out of the tax ambit.
Walk into any sweet shop in Kolkata and the dominant discussion between customers and cashier are the GST rates that have been levied on all the dozens of items that are on display.
“Currently we are calculating 5% GST on all sorts of sweets, except the chocolate-flavoured ones, where the rate is fixed at 28%. We will continue to do so unless there is further notification from the government differentiating between ordinary sweets, packaged suits and dry fruit- flavoured sweets. But the apprehension of harassment possibilities are always there,” said Sudip Mullick, the proprietor of the 132-year old Balaram Mullick & Radharaman Mullick. One of the most prominent chains, it has a total of six outlets throughout Kolkata.
Sweet shops across Kolkata have turned into centres of chaos: Customers are unable to decide which sweets to buy given that the before and after tax prices vary and then they get into a long discussion with the cashier to figure the exact GST on their buy.
For example, if you buy a few pieces of rosogollas, they will attract 5% tax. But if you are taking a can for your friend who lives in another city, you will be taxed at 18%. If the sweetmaker adds pista, or kesar, the rosogolla will again be eligible for 18%. The logic: the GST rate fixed for food items made out of dry fruit is 18%.
The government has clarified that the GST rate on the main product, and not on the ingredients, will prevail. But shop owners complain of confusion.
“We have about 200 products. There is one basic item with additives and condiments making a few value-added varieties out of the basic variant. So you can understand the complexity it can lead to, especially with the queue of customers in our stores where each customer has to wait for an average of 10 minutes to pay,” said Dipak Kumar Mukherjee, executive director, operations of K C Das Private Limited. K C Das, which is famous all over the country for its sponge rosogolla, started its first outlet in 1930.
There are around one lakh sweet shops in Bengal. An overwhelming number of them work from hole-in-the-wall existence and can’t think of buying computers and software to calculate and print bills.
These sweet traders of the state say that so far no official communication has reached them, or their association, and they are constantly in fear of inspectors turning up at their door.
But its not just the sweets but also the snacks accompanying them that have felt the GST pinch.
Popular snacks such as singara (a variant of samosa) and kachuri are confusing the maker and the consumers. The GST rate fixed for these two items is 12%, but the moment one adds dry fruits or nuts for taste, they are eligible for 18%. Again, if these items (plan, without additives such as nuts) are packed, they will be taxed at 18%.
Jiten Saha, the manager of Sri Gopal Sweets in Bondel Road pointed out problems in everyday life with retail customers. “Suppose if a customer comes and buys eight pieces of singara, two cups of mishti doi, four rosogollas and two chocolate sweetmeats. There are different slabs for each. Imagine the herculean task of calculating,” Saha said.
Alokesh Dholey, proprietor of Jagaddhatri Mishtanna Bhandar, said that this variety of GST slabs can create problems for both the sweetmeat retailers as for the government.
“Business with annual turnover of Rs 20 lakhs are totally exempted from GST, while for those having the figure between Rs 20 lakh and Rs 75 lakh, the rate is flat at 1%. This will, on the one hand, discourage sweet retailers to expand their business. On the other, there will be tendency of under-reporting turnover. Those with Rs 25 lakh turnover will try to show it within Rs 20 lakhs, while those at Rs 80-90 lakhs will try to show it within Rs 75 lakh,” he said.
Mullick also sniffs regional bias in fixing GST rates.
“Lassi, a staple food among north Indians, has been totally exempted from GST. But, 18% tax has been imposed on mishti doi (sweet curd), a favourite in Bengal that carries the same ingredients as lassi,” he told HT.
But whatever the confusion, one thing is for sure, GST will not be able dent the Bengali appetite for sweets.