Government reducing GST on food – People who love to eat out won’t suffer a lot of pocket crunch now that the GST council is pondering upon a reduction in the array of restaurants from 18% to 12% along with the withdrawal of input tax credit the eateries are being entitled with.
A specially constituted group of State Finance Ministers have come up with this idea of tax change followed by the trail of complaints that restaurants were capitalizing on the benefit of input tax credit for taxes that the suppliers pay and the customers had to bear the brunt. A senior officer said that this move won’t wring dry the customers for benefits.
Government reducing GST on food to 12% will benefit customers?
There are, however different slabs for the restaurants. Those restaurants whose turnover is upto 1 crore, fall under the category of composition scheme whereas others fall under the 12% scheme category. We are yet to hear from the finance ministry about the imposition of taxes on the Five Star hotels whatsoever.
But for the time being, the restaurants that fall under the composition scheme, enjoys lower compliance burden. The air-conditioned restaurants have a tax rate of 18% while the non-ac restaurants have 12% tax rate. So far, the tax rate is rolled in two slabs but more moves are yet to be finalized by the GST council.
The actual levy for most restaurants will remain unchanged as they were imposed with service tax and VAT earlier. The input tax credit is introduced to earn the consumers a breather form the malpractices of restaurants.
Government reducing GST on food vows to bring all things under a flat tax structure. Also, many people believe that it will end GST on restaurants in the long haul. The GST council will divulge their next moves as things are discussed deeply in a meeting to be held in Guwahati next month.