Kochi: For Malayalis, popular snacks paired with evening tea include pazham pori (banana fritters), uzhunnu vada (black gram fritters), parippu vada (lentil fritters), kozhukkatta (steamed rice dumplings) and neyyappam (sweet rice fritters). However, buying these from bakeries might shock you with their prices, ranging from ₹12 to ₹20. This price surge is due to the increased cost of raw materials used to prepare these snacks. To make matters worse, these local delicacies, which have a shelf life of less than 24 hours, are taxed at a hefty 18% GST!

The high GST rate forces bakery owners to sell these snacks at higher prices. For instance, unniyappam (another sweet fritter) is taxed at just 5% GST, but neyyappam, which is made with almost identical ingredients, falls under the 18% GST bracket. This discrepancy arises due to the lack of proper classification under the HSN (Harmonised System of Nomenclature) code, which continues to keep many regional snacks under the 18% GST slab.

In contrast, snacks sold in hotels attract just 5% GST. This lower rate applies because the HSN codes for hotel food items fall under the services category. For unniyappam, the specific HSN code classification results in a reduced tax rate. North Indian snacks like pav bhaji are also taxed at only 5% GST.

Interestingly, sweet treats like Mysore pak, ladoo and jalebi, often sold at higher prices per kilogram, also attract just 5% GST. While North Indian delicacies enjoy lower GST rates, Kerala’s traditional snacks remain trapped in the 18% GST bracket.

The Bakers Association of Kerala (BAKE) has stated that it approached the GST Council’s advance ruling mechanism over 18 months ago to resolve this disparity, but there has been no clarity so far. 

Currently, food products are categorised under different GST slabs—5%, 12% and 18%. 

BAKE has urged the authorities to unify this structure and impose a uniform 5% GST for all food products.