5% GST at restaurants from 15th Nov’2017: Still your food bill remains same!

Dining out at restaurants will get cheaper, as GST council have lowered the tax rate to a uniform five per cent from 12 per cent on non-AC restaurants and 18 per cent on air-conditioned ones comes into effect from 15th Nov’2017.

Currently, air-conditioned restaurants collect a charge of 18 per cent and non-AC restaurants levy 12 per cent tax.

The council said the restaurants cannot claim input tax credit (ITC) so the ITC facility is being withdrawn and a uniform five per cent tax is levied on all restaurants without the distinction of AC or non-AC.

Restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff will be levied 18 per cent GST but ITC is allowed for them.

Those restaurants in hotels charging less than Rs 7,500 room tariff will charge five per cent GST but will not get ITC.

As the new rate comes into effect from 15th Nov, here’s how it will impact you:

Decline:

Menu prices: Restaurant owners have been incrementing a price on their menu. This is because of the high rent they have to pay at expensive locations, loss of input tax credit and competition from big giants.

Input tax credit: Many restaurant owners have indicated that the move may drive prices up, due to withdrawal of input tax credit.

Incline:

Customer need not require to burn his bucks, as GST declined from 18 per cent tax to five per cent, you will be saving 13 percentage tax on your diet.

Similarly, at non-AC restaurants, you will be saving 7 percentage points tax on your bill as the same has been declined from 12 per cent to five per cent.

Want to just chill and order food at home instead? No worries as delivery apps such as Zomato and Swiggy will be delivering food from restaurants that will charge you the revised tax rates i.e five per cent.