GST: Christmas cake price goes up, Rs 150 tax alone!
Thiruvananthapuram: The price of cake has skyrocketed with the GST on Christmas cake rising to 18 per cent. One has to pay at least Rs 100-150 towards tax for one kg of cake from leading bakeries.
The tax on bakery products was mere 5 percent before the implementation of GST, which rose to 18 percent after the GST came into force. The new tax rate is applicable for all the bakeries which has an annual turnover of Rs 1.5 crore.
“The rise in tax has affected both the bakery owners and the customers alike. We had requested to reduce the tax, but in vain,” said Treasurer of Kerala Bakers Association M. P. Ramesh.
One kg cake costs Rs 300-900 according to its quality and ingredients. For a cake worth Rs 500, the buyer has to give Rs 90 as tax. Bakery owners said that the customers have started to ask whether GST-free cakes are available.
The bakeries which have a turnover up to Rs 1.5 crore need to pay the tax as per their income. But those with a higher turnover have to charge the tax from customers. Though GST for restaurant food was reduced recently, the high tax rates for bakery products still exist. Some of the snack items are available at both hotels and bakeries. But the customers have to pay only 5 percent tax for it in hotels, but 18 percent for the same product in bakeries.