Annapoorna Hotel Owner’s GST Critique Might Have Problems But Tamil Nadu BJP Should Learn To Hold Back

A video clip of D Srinivasan, the owner of the well-known Annapoorna hotels and restaurants in Coimbatore, telling Union Finance Minister Nirmala Sitharaman about the difficulties faced due to different rates of goods and services tax (GST) imposed on food items in the same bill, went viral recently.

He said, “There is 5 per cent GST on sweets but 12 per cent on savouries, and 18 per cent on cream-filled buns, whereas there is no GST on buns! Customers often complain, saying, ‘Just give me the bun, I’ll add the cream and jam myself'.” 

Further, referring to Bharatiya Janata Party’s (BJP) Coimbatore South MLA and the party's Mahila Morcha chief Vanathi Srinivasan, he said, “.....I have only one issue. The MLA amma sitting beside you, a regular Annapoorna customer, whenever she comes, she picks up a fight in the shop. You have kept GST at five per cent for sweets, giving input (input credit) for it, five per cent for food but not giving input, 12 per cent for savouries.

"Next, if you see in the bakery, bread and bun are same. All other things have different rates, going upto 28 per cent. This amma comes, eats jalebi, then says give coffee and karam (savouries). When we say the rate is 12 per cent for savouries, she comes for a fight. This problem happens with me daily. It is difficult to put different GST rates in a bill for the same family..."

"Please increase it (GST rate) uniformly for everything. Secondly, this MLA amma, is from our constituency. She said in the North of India, they are eating too many sweets, so the GST has been fixed at 5 per cent and 12 per cent for savouries. I said no. In Tamil Nadu, we call it sweet, karam, coffee (sweets, savouries, and coffee). So please consider it, madam; please make it uniform.”

Srinivasan, the hotelier, added that computers crash due to the different rates being levied on each item.

“The computer crashes when we try to input different GST percentages in a single bill. Even the GST officials are confused, as all items have the same input but different tax rates. This inconsistency is causing issues for both shopkeepers and customers.”

While the Annapoorna owner found support from people across the political spectrum, some pounced on the issue and criticised him very strongly.

One of the criticisms was his repeated reference to Vanathi Srinivasan as "inda amma, inda MLA amma (this lady, this MLA lady)," while explaining his case. It was seen to be in bad taste even though the two seemed to be well acquainted with each other.

The other was the way BJP functionaries reacted to the issue even when both Finance Minister Sitharaman and Coimbatore South MLA Srinivasan took it sportingly (at least on stage).

While some branded him a Dravida Munnetra Kazhagam (DMK) supporter, and said that Sitharaman should not be blamed as these decisions were taken by the GST Council and not her alone, others questioned the rates charged in Annapoorna restaurants.

A few others said that Srinivasan's (the hotelier's) argument had flaws. Some of them can be seen here and here.

A post by Chirag Chauhan, a chartered accountant with a sizeable social media following, stated that imposing a higher rate on some items in order to rationalise the tax structure would impose a higher burden on the common man.

Not losing any opportunity, the DMK criticised the BJP and asked if no one could question the Finance Minister.

Later, a video of the Annapoorna owner apologising to Sitharaman in the presence of Vanathi Srinivasan was posted on social media by a BJP office-bearer. This brought further blame on the BJP. Whether he apologised on his own or he was forced to do so is not known. 

Many said that whatever the case may have been, the video should not have been posted as it could give out a negative message to the city’s business community.

A few also pointed out that BJP functionaries could have instead given wide publicity to another part of the hotelier's remarks where he praises the Centre for certain initiatives during the coronavirus pandemic, which in his opinion saved hotels and restaurants.

Further, he had appreciated the improvements in the banking system in the last six-seven years with regards to getting loans.

Explaining what had changed, Srinivasan, the Annapoorna owner, said that six-seven years back, they had to first meet a manager to seek a loan and then after a few months they would be directed to a higher official. The ordeal would not end there and instead they would be sent to another officer higher in rank. This officer would then finally ask them to put down a large collateral to sanction the loan.

"The situation has changed a lot now. Bank officials themselves come to us to facilitate loans," he added.

What’s bad is that the episode has left the real issue, ie, the need to simplify tax structures, far behind and also deflected attention away from an important remark by Sitharaman, which was that Tamil Nadu was one of the few states that had not yet notified the PM Vishwakarma scheme. 

(The scheme was launched to provide skill training and financial assistance for artisans and craftspeople involved in traditional trades like blacksmiths, carpenters, potters, etc.)

And it could not have come at a worse time than this for the Tamil Nadu unit of the BJP. 

It is being questioned daily over issues such as the status of central funding for the second phase of the Chennai Metro even as metro projects in other states get funded and being accused of not releasing funds under the Samagra Shiksha Abhiyan scheme allegedly because the state is not in agreement with the three-language policy proposed by the New Education Policy. 

While the state unit has responded to these from time to time, the latest episode involving the owner of the Annapoorna hotel has the potential to reduce some of the goodwill generated by the party and further the narrative that the BJP is against Tamil Nadu.

Though state president K Annamalai, who is in the United Kingdom for a fellowship, has apologised, the party would do well to rein in some over-enthusiastic functionaries. It should ask them to be sensitive and respond with constructive criticism. This is all the more important when the ‘anti-Tamil Nadu’ tag is thrown at the party at the drop of a hat.

Also Read: With First Of Its Kind Problem-Solving Meeting For Coimbatore’s Industries, Central Government Has Finally Woken Up