Eating out to become cheaper as government slashes GST rates to 5% for restaurants

Addressing a media briefing after the 23rd GST Council meeting, Finance Minister Arun Jaitley said all restaurants in the country will be levied a GST of 5 per cent and no restaurant will have the input tax credit (ITC) benefit.

By: Express Web Desk | New Delhi | Updated: November 10, 2017 9:14 pm
gst, gst council, restaurants, arun jaitley, restaurants gst, restaurants new gst Finance Minister Arun Jaitley REUTERS/File Photo

Eating out at restaurants will now become cheaper as the Goods and Services Tax (GST) council on Friday decided to reduce the tax rate to 5 per cent from the earlier 12-18 per cent. Addressing a media briefing after the 23rd GST Council meeting in Guwahati, Finance Minister Arun Jaitley said all restaurants in the country will be levied a GST of 5 per cent and no restaurant will have the input tax credit (ITC) benefit. The new tax rate is applicable to all AC and non-AC restaurants, except those in the five-star restaurants, said Jaitley.

The five-star hotel with restaurants will attract 18 per cent tax with ITC benefits. The outdoor catering will also attract 18 per cent GST with ITC benefits. The hotels where the room rent is above Rs 7,500 come under the five-star hotel category.

In the biggest GST rejig yet, tax rates on over 200 items, ranging from chewing gum to chocolates, to beauty products, wigs and wrist watches, were cut to provide relief to consumers and businesses amid economic slowdown. As many as 178 items of daily use were shifted from the top tax bracket of 28 per cent to 18 per cent, while a uniform 5 per cent tax was prescribed for all restaurants, both air-conditioned and non-AC, said Jaitley.

ALSO READ: GST Council slashes tax rates on mass consumption items to 18%, only 50 items to remain in top 28% bracket 

The all-powerful GST Council pruned the list of items in the top 28 per cent Goods and Services Tax (GST) slab to just 50 from current 228. So, only luxury and sins goods are now only in highest tax bracket and items of daily use are shifted to 18 per cent. Also, tax on wet grinders and armoured vehicles was cut from 28 per cent to 12 per cent, he said, adding the tax rate on six items was reduced from 18 per cent to 5 per cent, on 8 items from 12 per cent to 5 per cent and on six items from 5 per cent to nil.

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 products on which tax rate has been cut from 28 per cent to 18 per cent.

READ | GST HIGHLIGHTS

The top tax rate is now restricted to luxury and demerit goods like pan masala, aerated water and beverages, cigars and cigarettes, tobacco products, cement, paints, perfumes, ACs, dish washing machine, washing machine, refrigerators, vacuum cleaners, cars and two-wheelers, aircraft and yacht. Items on which tax rate has been cut from 28 per cent to 18 per cent include wire and cables, furniture, mattress, trunk, suitcase, detergents, shampoos, hair cream, hair dyes, make up, fans, lamp, rubber tubes and microscope.

Tax rate on condensed mil, refined sugar, pasta curry paste, diabetic food, medicial grade oxygen, printing ink, hand bags, hats, spectacles frame and bamboo/cane furniture has been cut from 18 per cent to 12 per cent. That on puffed rice chikki, flour of potatoes, chutney power, fly sulphur recovered in refining crude and fly ash to 6 per cent from 18 per cent. Guar meal, hop cone, certain dried vegetables, unworked coconut shell and fish would attract nil GST tax as against 5 per cent now.

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  1. Ganesh Kamat
    Nov 12, 2017 at 5:58 pm
    GST Simplified to Double GST daily Collection√ ✓NO RETURN>keep Record ¶STOP Thief-Police Game? ✓1 Bank Transaction GST for 1st 5Cr to ALL ✓Cash Pay by Mobile-daily•
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      raj kishore
      Nov 10, 2017 at 9:55 pm
      PEOPLE ARE NOT SATISFIED WITH GST OF 28 TO RESTAURANT,OTHER DAILY USABLE ARTICLES ARE IN 18 ,NOW IT IS SUITABLE,OTHER THINGS ARE IN 28 ,STILL PEOPLE WILL CREATE AFFAIRS TO GOVT AS GST AND BEFORE IT ON NOV 8TH THE DEMONETIZATION GET PROBLEM TO REDUCE THE GST, DEMO HAD GAVE DIFFICULTY AND IT WAS NOT TO DO DEMO IN LARGEST DEMOCRACY.
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      1. R
        raj kishore
        Nov 10, 2017 at 9:43 pm
        THE GST COUNCIL MEETING WAS IN GUWAHATI,ASSAM TO DECIDE FOR DAILY ITEMS TO 18 FROM 28 AND RESTAURENT GST IS 5 IN BOTH AC AND NON AC EXCEPT FIVE STAR HOTEL IT IS 28 ,THIS WAS CONTROVERSIAL BUT 5 IS GOOD ONE AFTER PEOPLE WERE VERY ANGRY FOR THIS,CAUSING TENSION TO MODIJI.
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        1. Barb Dewyre
          Nov 10, 2017 at 9:35 pm
          Jaitley is like a driver who is learning on the job and is being paid while he is doing so.
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          1. R
            raj kishore
            Nov 10, 2017 at 9:34 pm
            THE RESTAURANT 'S GST WOULD BE 5 IN ALL TYPES AC NON AC EXCEPTION OF 5 STAR HOTEL AND RS 7,500 ROOM RENT IS TO GIVE 28 ,THE FOLLOWING SUBSTANCES ARE 18 LIKE-TOOTH PASTE,SHAMPOO,CHOCOLATE,CHEWING GUM,DETERGENT,DEDORANT,BOOT POLISH,NUTRITION DRINK,MARBLE,COSMETIC ARE 18 ,WHICH ARE TROUBLE SHOOTING,CEMENT,PAINTING COLORS AND OTHERS ARE BROUGHT TO 28 AND 50 ITEMS ARE IN SAME 28 ,IS SUITABLE TO SOME DAILY ITEMS,62 OUT OF 227 ARE 28 .THANKING YOU.
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