Eating out at restaurants can get cheaper as GST council, that down the charge per unit to a homogenous 5 per cent from 12 per cent on non-AC restaurants and 18 per cent on cool ones comes into result from Wednesday.
Currently, cool restaurants levy a charge of 18 per cent on food bill and non-AC restaurants levy 12 per cent tax.
The council aforesaid the restaurants didn't expire the input decrease (ITC) to customers then the ITC facility is being withdrawn and a homogenous 5 per cent tax is levied on all restaurants while not the excellence of AC or non-AC.
Restaurants in starred-hotels that charge Rs 7,500 or a lot of per day space tariff are going to be levied 18 per cent GST however ITC is allowed for them.
Those restaurants in hotels charging but Rs 7,500 space tariff can charge 5 per cent GST however won't get ITC.
The draw back
Menu prices: consistent with a report by Scroll, edifice house owners are mulling a value rise on their menu. this is often as a result of the high rent they need to pay at dearly-won locations, loss of input decrease and competition from huge eateries. many edifice house owners aren't convinced that a lower tax can conjure for the loss of input tax.
Input tax credit: Several edifice house owners have indicated that the move might drive costs up, courtesy with draw all of input decrease. underneath input decrease, businesses will claim Associate in Nursing offset on the tax paid on inputs against the tax paid to the govt.. But, currently the Council has done away with the decrease on food things used as staple.
According to Federation of Hotels and Restaurants Association of Bharat President cheap Oberoi the input decrease accounts for 3 to four per cent of a restaurant’s profit, the report additional.
The upside
You won’t ought to burn a hole in your pocket so as to dine at fancy AC restaurants. From 18 per cent tax to 5%, you'll be saving thirteen proportion points tax on your food bill.
Similarly, at non-AC restaurants, you'll be saving seven proportion points tax on your bill because the same has been slashed from twelve per cent to 5%.
Want to only chill and order food reception instead? No worries as delivery apps like Zomato and Swiggy are going to be delivering food from restaurants which will charge you the revised tax rates i.e 5%.
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