Good news for foodies: GST rate on restaurants has decreased to the 5 percent
Eating out in restaurants has become cheaper than earlier due to slashes in GST rate. In 23rd GST council meeting led by Finance Minister Arun Jaitley revised the rates of GST over many items. The GST rate has been cut to a uniform 5 percent from 12 percent or 18 percent. However, restaurants, won’t get the benefits of input tax credits. Finance Minister Arun Jaitley announced the changes after a long meeting with state finance minister on Friday, November 10, 2017.
The Federation of Hotel and Restaurant Associations of India has thanked the government, “We welcome the reduction in GST slab… However, the very concept of ITC (input tax credit) is central to GST, which is to prevent cascading of taxes,” restaurateur and the association’s vice president Rahul Singh told news agency PTI.
As restaurants will not get input credit tax, they may raise the price of the menu to keep the cost under control. As per Mr Jaitley’s announcement, the five-star restaurants and outdoor catering will remain on 18 percent GST with input tax credit benefits.
The “panic-stricken govt has no option but to concede demands for change” in the GST, former Union Finance Minister P Chidambaram tweeted yesterday.