GST rollback: Eating out to cost less in Mumbai as tax levied on restaurant bills reduces
With the new 5 per cent tax replacing the controversial 18 per cent GST, eating out will cost less, starting tomorrow
With the new 5 per cent tax replacing the controversial 18 per cent GST, eating out will cost less, starting tomorrow. Taking out the 'ouch' from the restaurant 'couch', all eat-out establishments are set to reduce the Goods and Services Tax (GST) to 5 per cent, from the 12 and 18 per cent they were charging patrons since GST came into effect. The change happens from November 15. "So, we should be in a happy space now," said Adarsh Shetty, president of the Indian Hotel and Restaurant Association (AHAR) at a press conference in Wadala yesterday.
Adarsh Shetty. Pic/Falguni Agrawal
Shetty said the benefit of less GST "would be passed on to the consumers", which means their bill would be less, of course. "We, restaurateurs and hoteliers, were charged 12 per cent GST for non air-conditioned restaurants and 18 per cent for air-conditioned establishments. Our takeout or home delivery, which comprised at least 30 per cent of business, was saddled with a GST of 18 per cent. We had taken a significant beating. We are happy this is going to end now," said Shetty with a smile.
Abhi khushi, no gham
The president said, "Our industry, hotels and restaurants, was the only one where there was discrimination in a/c and non-a/c. As it is, our GST was shockingly high when compared to gold (3 per cent) and namkeens (savouries), which was at 5 per cent. When it rolled out, we were expecting to be charged a GST between 2 and 5 per cent. Imagine our dismay when it was at 12 and 18 per cent!"
Things were heating up for patrons opting for air-conditioned comfort. "The segregation between a/c and non-a/c did not make sense. For instance, there was no difference when customers walked into a/c stores and bought something and when they bought stuff from non a/c stores, they paid the same GST; so why segregation in our industry for restaurant patrons?" asked Shetty.
Also read: GST: Tax burden on several items to be cut
Pehla pehla task hai
Thanking the central and state governments for the rollback, Shetty said, "This government has its finger on the pulse of the common man."
"Days like when a customer threw back a takeaway parcel on the cashier's face, asking 'how much more of our blood are you going to suck?' are all set to end. In the end, we are consumers too. A hotelier goes out with his family to other places for food and drink. He is not always confined to his own establishment. When he does that, he becomes a consumer too. It is a good time then for both, the consumer and the industry," he finished, but not before adding, "We were bleeding then, and it has stopped now. Our top tasks are to revive the customer base we have lost and ensure compliance; as a responsible industry we do respect that we have to pay taxes."
Bon appetit, Mumbai!
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>> The GST on your restaurant bill will now be 5 per cent, down from the 12 or 18 per cent earlier.
>> The tax break-up will be 2.5 per cent State GST (SGST) and 2.5 per cent Central GST (CGST).
>> It is supposed to come into effect from November 15. Some establishments under the AHAR umbrella may open a few hours late that day, as the software is being configured for the new rates.
>> Prices on the menu will remain the same; it is a customer's overall bill that is coming down.
>> The 5 per cent GST is not applicable for restaurants inside five-star hotels. Hotels with tariffs over Rs 7,500 will be taxed at 18 per cent.