GST rollout: Taxes on food and drinks in restaurants to go down

The impact of GST on food and liquor will be lighter on the pocket as the tax on food and drinks in air-conditioned restaurants will drop from 20.5 per cent to 18 per cent, whereas non-air-conditioned restaurants will levy a 12 per cent tax on food and drinks.

By: Express Web Desk | New Delhi | Updated: July 1, 2017 1:33 pm
punjab, punjab liquor, punjab liquor ban, liquor ban, punjab highway liquor ban, punjab assembly, liquor, hotels, restaurants, clubs, highway, punjab highway, india news, indian express Liquor had a 6 per cent service tax across segments, which has now been withdrawn. (Source: File Photo)

With the rollout of the Goods and Services Tax (GST), there will be a considerable impact on services provided by hotels on food and alcohol.

The impact of GST will be lighter on the pocket as the tax on food and drinks in air-conditioned restaurants will drop from 20.5 per cent to 18 per cent, whereas non-air-conditioned restaurants will levy a 12 per cent tax on food and drinks. Till now, customers had to pay a tax component that consisted of a 14.5 per cent VAT and a 6 per cent service tax.

The restaurants having licence to serve liquor (with full ITC) will levy a tax of 18 per cent, while those not having the facility of air-conditioning or central heating at any time during the year and not having licence to serve liquor (with full ITC) will levy tax of 12 per cent. The 5-star hotels will come under the highest slab of 28 per cent GST.

Liquor had a 6 per cent service tax across segments, which has now been withdrawn.

GST, which was launched on the midnight of Friday at a special ceremony in the Central Hall of Parliament is the most sweeping tax reform since Independence. Prime Minister Narendra Modi on Friday said the GST will be “not only a tax reform but an economic and social reform as well” that will unify the nation, “check corruption and end harassment at hands of officers”.

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