Bengaluru: The Indira Gandhi canteens which are currently operating 101 canteens across Bengaluru city is now posed with another issue post introduction of the GST. Reports suggest that talks are on to discuss if the burden of the GST, which if passed on to customers may increase the price of the subsidized food should be borne by the state government or the BBMP.
The Indira canteens, an ambitious programme of the state government aims to serve hygienic and quality food at Rs 5 for breakfast and Rs 10 for meals.
If we go by the statistics, the canteens which will be doling out 500 plates each time thrice a day will fetch around Rs 12.62 lakhs across the 101 canteens. However with imposition of 18 per cent GST and 10 per cent service tax this figure will work to Rs 16.16 lakhs approximately. With the remaining 97 canteen expected to be opened by October 2, 2017 the amounts would be around Rs 24.75 lakhs and post GST calculation it would translate to Rs 31.68 lakh.
In case the GST is added to the cost of meals the subsidized prices for breakfast and meals would work to Rs 6 and Rs 12 respectively.
It is learnt from sources that if the food served at these canteens were free of cost then GST would not have come into play. However since people are paying a subsidized amount while availing food at the canteen it does fall under the gambit of GST.
While discussions are going on if the State government or BBMP will bear the tax burden sources have hinted that the BBMP is considering to pay 18 per cent GST after the service gets registered.
