Thiruvananthapuram: Toddy outlets in Kerala that sell food along with toddy will now be required to register under the Goods and Services Tax (GST) system. Acting on a report submitted by the State Excise Commissioner, the GST Department has begun preparations to set the criteria on revenue and sales for bringing these establishments under the tax net.

When GST was first implemented, alcoholic beverages, including toddy, were exempt from its purview. However, many toddy shop operators took advantage of this exemption, transforming their outlets into restaurants that served only minimal quantities of toddy while generating significant profits from food sales. The government now plans to plug this loophole and bring such operations under GST regulation.

As per existing GST norms, restaurants with an annual turnover exceeding ₹20 lakh are liable to pay 5% GST. Although bars are exempt from GST on liquor, they are required to pay GST on food and non-alcoholic beverages. Similarly, buildings charging more than ₹7,500 in monthly rent are taxed at 18% GST if food is sold.
The state now plans to apply the same model to toddy shops, ensuring that food and other non-alcoholic services are appropriately taxed.