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punjab highway, india news, indian express Liquor had a 6 per cent service tax across segments, which has now been withdrawn.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Liquor had a 6 per cent service tax across segments, which has now been withdrawn.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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  1. K
    Kumar Krishna
    Jul 1, 2017 at 4:55 pm
    This is bhakwas report. I went to a small roadside restaurant, this afternoon. I took one idly, vada and coffee. It used to cost Rs.45. Today I had to s out Rs.49. GST 4.05. Since I work in a small establishment and I take my lunch everyday in this roadside hotel my monthly lunch expense has gone up by 9 . How many such 9 and 12 will add up to my monthly expense, only Arun Jaitley will know. Am i going to get a 9 rise? No way. My employer says his business is yet to recover from demonetisation and if the situation continues, he may have to lay off some employees! Modi said he is going to catch black money holders He has only managed to punish the middle class who voted for him.
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      Ash
      Jul 1, 2017 at 2:50 pm
      One nation ,one market!Pity we can't feel safe in this one nation.A boy returning from Delhi to his village a few miles away is knives to death on a crowded train.No one objects,no one from the rail staff,no one from rail police,no one from the station where body was dumped.What are we celebrating, that we have gone one more step lower to anarchy,that the police are afraid to act when they see a small mob.BJP leader comments weak and lacking authority or will to act.These actions by a few have shamed Hindus and India and need to be condemned in much more stronger terms and action taken to sa uard travel.No body is going to invest in this climate of om killings!South Korea president is receiving more attention in USA while Modi visit was in the main overlooked. What a comedown when you compare the population of INDIA and Korea.
      Reply
      1. S
        Sujatha Selvam
        Jul 1, 2017 at 2:48 pm
        Please do not misguide the people with catchy heading like "Taxes on food and drinks in restaurants to go down" Not even a 1 percent of the population are going to Restaurant for taking food and drinks. The 99 is in fact the most affected lot. They have to pay more money than earlier for getting for the same goods/services.
        Reply
        1. S
          Sujatha Selvam
          Jul 1, 2017 at 2:42 pm
          GST - will increase the hardship of the people, please ask your reporter to deep and analysis the impact of GST. It is in fact a Ghost tax. Consumers will not be paying taxes anyway, and the traders do not want to harm their customers either, then starts a parallel economy to evade these taxes. And it will increase Corruption. It will increase black money.
          Reply
          1. S
            sindhu
            Jul 1, 2017 at 4:08 pm
            Can you please explain your argument with a simple example?. There were taxes before GST also right?. How things will become bad now?
            Reply
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              Sujatha Selvam
              Jul 1, 2017 at 7:34 pm
              Yes, before also there were taxes but lesser. Open your eyes and go around the city and see the people's reaction how they have been burdened now with new taxation.
              1. S
                Sujatha Selvam
                Jul 1, 2017 at 7:43 pm
                Sindhu: Here is reply to your question from a writer of this column: "This is bhakwas report. I went to a small roadside restaurant, this afternoon. I took one idly, vada and coffee. It used to cost Rs.45. Today I had to pay Rs.49.05. The extra 4.05 is GST 4.05. Since I work in a small establishment and I take my lunch everyday in this roadside hotel, my monthly lunch expense has gone up by 9 percent. How many such 9 percent and 12 percent will add up to my monthly expense, only Arun Jaitley will know. Am I going to get a 9 percent rise? No way. My employer says his business is yet to recover from demonetisation and if the situation continues, he may have to lay off some employees! Modi said he is going to catch black money holders. He has only managed to punish the middle class who voted for him.
                1. S
                  Sujatha Selvam
                  Jul 1, 2017 at 8:46 pm
                  How come Sanitary pads are a luxury? Do women bleed out of choice? Instead of removing tax from such basic necessity, Government has increased the tax from 6 percent to 12 percent. Menstruation is an expensive affair from today onwards...!!
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                Parth Garg
                Jul 1, 2017 at 2:00 pm
                Now the people below the poverty line will throng the restaurants for cheap food and drinks. Bravo GST!
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                  Aravinthan S
                  Jul 4, 2017 at 1:50 pm
                  it is not fair to compare in this way.. avoid that type of hotels.. who charging you taxes..
                  Reply
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                    Aravinthan S
                    Jul 4, 2017 at 1:51 pm
                    it is not fair to compare in this way.. avoid that type of hotels.. who charging you taxes..
                    Reply
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