GST 2.0 could undermine dietary health
Context
- India’s GST reform (GST 2.0) introduces simplified tax slabs: 5%, 18%, and 40% for sinful/ultra-luxury goods.
- Several everyday sugary and processed foods are being taxed at lower rates.
- This may unintentionally encourage unhealthy eating habits, worsening non-communicable diseases (NCDs).
Key Features of GST 2.0
✔ Tax slabs:
- 5%: Everyday essentials and some processed foods like pizza bread, chocolates, jams.
- 18%: Standard products.
- 40%: Aerated drinks, sugar-based beverages, luxury goods.
✔ Policy intent:
- Simplify tax structure.
- Rationalise compliance.
- Promote fairness.
✔ Public health concern:
- Blanket tax cuts for sugar-laden, calorically dense products without health warnings.
- Could boost consumption of unhealthy foods, especially among children and adolescents.
Public Health Risks
- Access to unhealthy foods
- Items made from refined flour (maida) or sugars will be cheaper, not just healthier options like sourdough or whole wheat bread.
- Substitution effect
- Increased cost of sugary drinks may push consumers toward cheaper alternatives like chocolates and desserts, negating health benefits.
- Inadequate food labelling
- Lack of trustworthy front-of-pack labelling (FOPL) leaves consumers unaware of nutritional risks.
- Over-labelling or unclear thresholds further confuse shoppers.
Current Regulatory Gaps
✔ Food labelling
- Draft rules since 2022 stalled.
- Supreme Court urged finalisation in 2025 with preference for warning labels.
- WHO-SEARO and ICMR-NIN thresholds under consideration.
✔ Advertising regulations
- Restrictions near schools exist but are limited.
- Central Consumer Protection Authority and ASCI guidelines regulate misleading advertisements.
- No comprehensive regime linking advertising to FOPL status.
WHO-SEARO Nutrient Profile Model (NPM)
✔ Uses category-specific thresholds for sugars, fats, sodium, etc.
✔ Based on per 100g/100ml rather than “per serving” to prevent manipulation.
✔ Flags non-nutritive sweeteners, promoting reformulation.
Policy Recommendations
1. Mandatory “high in” warning labels
- Thresholds aligned with scientific guidelines (WHO-SEARO, ICMR-NIN).
- Transparent labelling helping consumers distinguish healthy vs unhealthy foods.
2. Link GST rates to nutritional compliance
- “High in” products taxed at ≥18%.
- Compliant products taxed at ≤5%.
- Avoids mismatches where sugary foods are incentivised while drinks are penalised.
3. Advertising restrictions
- Ban ads targeting children if products are “high in” unhealthy ingredients.
- Prohibit advertising during peak child-viewing hours across TV, print, and social media.
4. Redirect sin tax revenues
- Use funds for:
- NCD prevention campaigns.
- Enforcement of labelling rules.
- Monitoring industry reformulations.
Global Comparisons
✔ Chile’s model
- Front-of-pack warnings prevent high-sugar products from being advertised to children during specific times.
✔ Asia and Africa
- Sugary drink taxes have reduced consumption by 2.5%–19%.
Implications for India
- Without proper labelling, affordability gains may exacerbate unhealthy diets.
- A science-based, transparent, and enforceable system can align taxation with public health goals.
- Protects consumers from industry-driven marketing practices.
- Supports the national strategy against NCDs like diabetes, hypertension, and obesity.
Conclusion
GST 2.0’s simplified tax structure may inadvertently promote unhealthy diets unless paired with strong, science-based labelling and regulatory frameworks. A comprehensive approach linking GST rates with nutrient profiles, enforcing advertising restrictions, and redirecting sin tax revenues to public health can ensure that affordability doesn’t come at the cost of nutrition and long-term wellbeing.
Related Posts
