Your coffee and pizza are going to get expensive after GST

By Team YS|22nd May 2017
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There are several co-working spaces that have coffee on tap and pizza that flows from Domino's Pizza and Pizza Hut. But going forward someone has to pay extra for these things, as anything that goes into a pizza (including the bread), and the processed-branded coffee will attract a tax of five percent when the Goods and Services Tax (GST) comes into force.

This is also not going to please the filter coffee loving Indian family. There are over 10,000 small mom-and-pop branded coffee retailers in the country, who will all have to charge their customer slightly more for that 100 gram packet.

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According to the Indian Retail Forum, Indians consume about Rs 10,000 crore worth of fast food every year. According to the Coffee Board of India, we consume 90,000 tonnes of coffee every year. The IBEF points to these coffee facts, and why Indian consumers will be unhappy.

  • India is the third-largest producer and exporter of coffee in Asia, and the sixth-largest producer and fifth-largest exporter of coffee in the world.
  • The country accounts for 4.05 percent of the global coffee production.
  • Coffee production in FY 2016-17 is pegged at 320,000 tonnes, as against 348,000 tonnes in FY 2015-16.

From the Himalayas to Kanyakumari drinking coffee is India's favourite pastime. So those who frequent Starbucks for a cup will have to shell out more than usual. The government hopes to raise revenues from consumption.

The government’s tax proposal listed the following as falling in the five percent tax bracket: “Processed, roasted or decaffeinated coffee, coffee husks and skins, coffee substitutes containing coffee in any proportion, other than coffee beans not roasted, processed tea leaves, spices like cinnamon and cinnamon-tree flowers, cloves, nutmeg, mace and cardamom, thyme, bay leaves, curry.”

Now bay leaves and cardamom also go into Indian preparations. So will restaurants hike prices? We will know only on July 1.