Indian Tax Solution
From today onwards, dining out with your family and friends will be easier on your pocket, owing to the GST council reducing the tax rate for restaurants to a mere 5%.
Previously, Non-AC and AC restaurants were prescribed 12% and 18% GST rates respectively, in additional to the benefit of ITC( a form of credit used to set off your tax liabilities), which has now been fixed at a uniform 5%. Finance Minister Arun Jaitley made the announcement on Saturday evening during the GST council meeting, however there has been no formal notification from the government yet, allowing restaurants to collect the old tax rates from the customers.
Restaurants in luxurious starred hotels will be charged in accordance with their room tariff. 18% GST is applicable along with ITC benefit if room tariff is higher than Rs.7,500 , else the rate remains at 5% with no ITC.
Wet grinders and armoured vehicles also were under the radar as the rate was massively reduced to 12% from 28%. Chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after-shave, deodorant, detergent and washing power, razors and blades, cutlery, storage water heater, batteries, goggles, wrist watches and mattress are among the several other products which saw their tax rates reduced from 28% to 18%.
The revision was necessary according to ICRA Vice President and Sector Head Pavethra Ponniah, who mentioned about the changes being positive as it would bring down dining cost , attracting more attendance and generating more revenue for restaurants struggling to generate demand. He added to this saying that the ITC claim by most restaurants were mostly negligible as most raw material purchases like grains ,vegetables , seafood and poultry were exempt from GST.
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