With eating out falling in the 18 percent tax slab under the newly implemented Goods and Services Tax (GST) regime, restaurants and their patrons are coping with the change. While some customers complained of being levied service charge despite the restaurant charging GST on Sunday, several restaurant owners said that lack of clarity over the implementation of the new tax regime has led to confusion.
While some like Riyaaz Amlani, president of the National Restaurant Association of India (NRAI), said that the transition to GST was “seamless”, others, struggling to update their accounting software, felt that the tax norms need to be stated with more clarity.
“Clarity was not really there until the last minute,” said Rejaneek Barot, owner of Revival Restaurant in South Mumbai. “This prevented us from updating the accounting software to incorporate such changes until July 1 itself.”
Persis Irani, owner of Tulip’s Restaurant and Delifresh Bakery stressed the challenges of GST. “There are many complicated guidelines that Delifresh must adhere to. Some items like bread are not taxed, while other items are. Our financial advisors aren’t sure what items it (GST) applies to. We are unsure whether to impose a service charge or not. It took us over three hours to update our software for GST. There is no clarity.”
However, for some others, it was different. “Everything seemed like business as usual,” said Taronish Irani of Doolally Taproom. Restaurant goers have also felt that they need to watch their expenses while eating out. Poorvi Bellur, an intern, said, “Going out has definitely become more expensive. People who do not worry about spending money are now concerned about their expenditures. Many of my co-workers are thinking of getting home food.”
“I think it is simpler to have one tax,” said Abhimanyu Kapur. He, however, added, “I do not think it is necessary to have a 6% difference between AC and non-AC restaurants,” Kapur added.
“Although GST has not made dining out cheaper, it has made me understand my bill a lot better. The old tax system left me confused because there were so many charges, while now I only have one tax to worry about,” said Diveek Jain, an entrepreneur.