It is not ac­cu­rate for restau­rants to say they will not drop the prices of their meals be­cause there are ad­di­tion­al costs in prepar­ing the food, Trade and In­dus­try Min­is­ter Vas­ant Bharath said yes­ter­day. Gov­ern­ment's plan to re­move the 15 per cent Val­ue Added Tax (VAT) from some 4,000 food items was im­ple­ment­ed yes­ter­day.

Bharath was re­spond­ing to state­ments by the Trinidad Ho­tels, Restau­rants and Tourism As­so­ci­a­tion, which said al­though many food items were now VAT-free, prices on meals would not be re­duced.

The as­so­ci­a­tion's pres­i­dent Has­sel Thom said on Wednes­day while VAT had been re­moved from non-lux­u­ry food items that would not nec­es­sar­i­ly re­duce the cost of a meal in a restau­rant or oth­er food and bev­er­age op­er­a­tions that were VAT-reg­is­tered.

To con­vert the "non-VAT­able raw ma­te­r­i­al" to a fin­ished meal re­quired the use of elec­tric­i­ty and wa­ter (both VAT­able com­modi­ties) with oth­er raw ma­te­r­i­al classed as lux­u­ry items, Thom said. "This process in it­self con­verts the fin­ished prod­uct to a VAT­able com­mod­i­ty," he added.

But Bharath dis­agreed, say­ing since thou­sands of VAT-free items would re­duce the in­put costs of any restau­rant or food out­let, then the over­all cost, like the price the meal was sold for, should al­so be re­duced. "It is not an ac­cu­rate state­ment that the prices at the restau­rants would not be dropped be­cause their goods would no longer be VAT­able and clear­ly their in­put cost would have gone down," Bharath said.

He said be­cause of open com­pe­ti­tion the Gov­ern­ment could not dic­tate to restau­rants what price to sell their meals but the choice of where to dine, he added, was left to the con­sumer. Bharath added: "It is open com­pe­ti­tion and there­fore the con­sumer has to make a choice whether or not they will want to go to a par­tic­u­lar restau­rant.

"If there is one out­let that is sell­ing a snack box (two pieces of chick­en and fries) for a par­tic­u­lar price and an­oth­er sell­ing the same item for a cheap­er price, it is up to the con­sumer where to pur­chase. "Gov­ern­ment can't in­ter­vene and de­mand how busi­ness­places should sell their food."

He de­scribed yes­ter­day's im­ple­men­ta­tion of the VAT re­moval as "pro­gress­ing." De­spite com­plaints from con­sumers that they felt lit­tle or no re­lief in their pock­ets when they vis­it­ed var­i­ous su­per­mar­kets yes­ter­day, Bharath as­sured the mea­sure would bring fi­nan­cial re­lief to thou­sands of house­holds.

"We are pro­gress­ing and we al­ready have made much progress. We re­main com­mit­ted to putting things in place and all our stake­hold­ers have been do­ing their part as best as they can," Bharath added. He said he was en­gaged in lengthy meet­ings on Wednes­day with his le­gal team, su­per­mar­ket own­ers and mem­bers of the Cus­toms and Ex­cise Di­vi­sion to fine tune nec­es­sary de­tails.

Urg­ing mem­bers of the pub­lic to be pa­tient, Bharath said the process would take time to com­plete. "This will be es­pe­cial­ly so in the larg­er su­per­mar­kets where they have to in­ter­pret thou­sands and thou­sands of items but at the end of the day, prices are guar­an­teed to drop," the min­is­ter added.