Indian Tax Solution

Eating Out Or Takeaway: How GST Will Affect Your Restaurant Bill

Since the roll out of the new Goods and Services Tax (GST) regime, customers and business owners are getting accustomed to the new taxation rules and registering under the indirect tax regime to claim input credits. According to the rules, GST on eating at 5-star hotels has become slightly more expensive but the tax rate on takeaways has led to some confusion, prompting the Central Board of Excise and Customs (CBEC) to clarify the issue. "A uniform GST rate of 18 per cent will be charged on takeaway as well as food served from a non-AC area of a hotel or restaurant if any part of it has a facility of air conditioning" CBEC stated in a tweet.

For example if you have ordered take-away from the ground floor of a restaurant which is not air-conditioned, you will still have to pay 18 per cent tax if the outlet has an AC area in some other part of the establishment.

For restaurants which serve alcohol, the GST rates that will be levied by restaurant-cum-bars where the first floor area is air-conditioned and used for serving food and liquor while the ground floor only serves food and non-AC will be the same. The CBEC said tax will have to be charged at 18 per cent irrespective of from where the supply is made, first floor or second floor.

"If any part of the establishment has a facility of air conditioning, then the rate will be 18 per cent for all supplies from the restaurant," it added.

Under GST, if you are eating out at non-AC restaurant, you will have to pay 12 per cent as tax. This comprises of Central GST (CGST) of 6 per cent and 6 per cent State GST (SGST).

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