GST rates on restaurants may be lowered
Restaurant
The GST rates could be lowered because of complaints that restaurants were pocketing the benefit of input tax credit for taxes paid by suppliers
The GST rate on restaurants is expected to be lowered to 12% from the current 18%, the Times of India reported Wednesday.
The Times reported that the possible lowering of the GST rates comes after "complaints that restaurants were pocketing the benefit of input tax credit for taxes paid by suppliers"and because the tax burden on people eating out was high.
"It is one segment that was not passing on the benefits to consumers," the Times reported a senior officer as saying.
It was not yet clear what the GST rate imposed on five-star hotels would be
The Times reported that should the GST rate be lowered, there will then be two rates for restaurants.
Five per cent for restaurants with a turnover of up to Rs 1 crore and which opt for the composition scheme, and 12% for others.
The Times added that it was not yet clear what the GST rate imposed on five-star hotels would be.
The current GST rate imposed on air-conditioned restaurants is 18%, and that on non-AC restaurants is 12%.