GST stumps Indira Canteen, will the government pay 18 per cent?

The State government’s ambitious project to serve good food at subsidised rates to the poor at Indira Canteen may be hit by the GST burden, now. However, it is being discussed if the BBMP should pay the tax so as not to burden the canteen further, reports Kannada Prabha.

BBMP had planned to set up 198 canteens serving 500 plates each time thrice a day. However, currently only 101 Indira Canteens are functioning serving 900 to 1,500 plates per day. It is expected that by October 2, all 198 canteens will start functioning. Taking into consideration of 1500 plates per canteen, a total of  2.97 lakh plates food will be served per day. For this, fee collected from the consumers (the price on food) will be Rs 24.75 lakhs. But with the GST, the BBMP may have to pay, Rs 31.68 lakh. Accordingly, Indira Canteens will come under GST. This may pose challenges for the BBMP to serve breakfast at Rs 5 and lunch at Rs 10. If at all GST is added, the breakfast may cost Rs 6 and lunch at Rs 12 at the Indira canteen. However, now the BBMP is considering to pay 18 per cent GST after the service gets registered.

BBMP Tax and Finance Standing Committee chairman MK Gunashekhar told Kannada Prabha that Indira Canteen will definitely come under GST.  If the food were served completely free GST would not apply. But the food is being served at subsidised rates and customers are paying for it, so GST has to be paid. It is being debated if the State government or BBMP will pay the tax.

A week after the inauguration, Indira Canteens are still reeling under public criticism that there is shortage of food and the quantity being less. The canteen has also come under criticism for cooking at Palace Grounds Kalyana Mantap as kitchens are not yet ready. The officials are finding it difficult to meet the demand. Mayor G Padmavathi is constantly making rounds visiting the canteens at various localities. At Azad Nagar ward, public complained to the Mayor that the quantity served is very less. 

• GST for Indira Canteen
• indira canteen
• karnataka