For most restaurants and retail shops in the city, it was business as usual after the Goods and Services Tax (GST) kicked in on Saturday. However, most of the restaurateurs and traders felt that the impact of the new tax regime would be felt at the end of the month.
As per the rates announced, the tax had dropped from around 20 per cent to 18 per cent for eating at air-conditioned restaurants. For non-AC restaurants, it had hit 12 per cent from around 14 per cent. While the price of items such as rice and wheat has increased, the cost of food delivery also saw a marginal raise.
Meanwhile, restaurants witnessed a weekend rush on Saturday, despite the increase in prices. “It has gotten better for us. From 19.5 per cent it has come down to 18 per cent for all AC restaurants. However, the real test of this tax system will be when we file our quarterly returns,” said Anurag Katriar, executive director and chief executive officer of deGustibus Hospitality, which operates restaurants such as Tote on the Turf and Indigo.
Restaurants that operated post 12 am last night had a tough time initially. “Our restaurants were open till 1 am today. We had to provide consumers with manual bills for food items ordered before 12 am under Value Added Tax, and those ordered after midnight under the GST,” he added.
Most restaurants, however, did not see any impact on their business on the first day. “Business was as usual today. The true impact will be known in a month or two when we know the change in prices for our input cost,” said Riyaaz Amlani, chief executive officer, Impresario Entertainment and Hospitality Private Limited, owner of Smokehouse Deli, Salt Water Café and Social.
Even food ordering sites witnessed no specific difference in the rush of consumers. “We’re experiencing the same growth trajectory as we have seen for months. GST will ensure a level-playing field for all food players by ensuring that everyone is compliant with the policy,” said Sagar Kochhar, chief marketing officer, Faasos.
For consumers, it was more about the choice of food than the place. “Due to my busy work schedule, I do not get time to go out. I continue to order food at home, though it costs marginally higher. However, now I may maintain precaution while ordering items like aerated drinks, which cost more now,” said Neha Birbeiya, a media professional.
Many dealers, including pharmacy stores and retail shops, expressed confusion over the addition of taxes. They said they are waiting for a day or two before revising the tax slabs. “The MRP for drugs will remain unchanged till the National Pharmaceutical Pricing Authority comes out with new pricing,” said Jagannath Shinde, president, All India Organisation of Chemists and Druggists.
“As the food trade markets are closed till Monday, we are selling available stock at previous rates. Once the new stock come, we will apply the revised fares. What we fear, however, is the filing of returns at the end of month, which will be an arduous process,” said Sagar Savla, owner, Champion General Stores in Chembur.
Others claimed they were taking financial advice from their Chartered Accountants before introducing the tax slabs. While entertainment outlets were witness to a rush, owners expressed confusion over the tax levy. “We have not changed to the new regime. We continue to charge entertainment tax as we have not received any directive from the government,” said Nambi Rajan, owner of Aurora Talkies in Matunga.
App-based cabs likely to charge less
Rides in cool and app-based cabs could be cheaper under the GST regime. The fares are expected to drop marginally, as the tax levied would now be 5 per cent, instead of the earlier 6 per cent. On Saturday, Ola sent a text message to its regular users, saying, “The government has introduced GST, a forward-looking tax reform from July 1 onwards. It replaces the existing service tax and reduces the overall tax paid on your Ola rides.”
The official spokesperson from Uber said the reduction of tax from 6 to 5 per cent is a step in the right direction. The government has not only reaffirmed its pro-consumer, pro-business stance by keeping transport services in the lowest tax bracket, it has also put to rest any apprehensions among drivers and riders around GST rates being inflationary, he said.