The GST Council on Friday decided to reduce tax rate on a wide range of daily use items to 18 per cent from current 28 per cent. After the GST council meet in Guwahati, Finance Minister Arun Jaitley said that the Council has decided to cut tax rate for restaurants to 5 percent. The new tax rate would be applicable to both AC and non-AC restaurants, except those in five-star hotels.
Out of 228 items in the 28% tax bracket, 178 have been put into the lower tax category of 18%, Finance Minister Arun Jaitley announced at a press briefing after the GST Council meet in Guwahati on Friday. The changes will be applicable from 15 (November). All restaurants in the country to be levied GST of 5%, no ITC benefit to any restaurant.
"Consumers will be benefited by lower prices as most of the taxable items are in the 5%, 12% or 18% slabs," finance minister Arun Jaitley told a press conference after the meeting.
The GST Council also decided to give a simplified GSTR-3B form for those businesses which have nil tax liability or have no transactions to file in invoice. The timeline for filing of initial returns GSTR-3B for all businesses have been extended to March from December earlier.
Meanwhile, Prime Minister Narendra Modi said the recommendations made by the GST Council will further benefit the people and add strength to the tax regime. Modi also said public participation was at the core of the government's functioning and that all its decisions were "people-friendly and people-centric".
"The recommendations made by the GST Council today will further benefit our citizens and add strength to the GST. These recommendations are in spirit of the continuous feedback we are getting from various stakeholders on GST," he said on Twitter.
Currently, 12 per cent GST on food bill is levied in non-AC restaurants and 18 per cent in the air-conditioned ones. All these got input tax credit, a facility to set off tax paid on inputs with final tax. The GST, implemented from July 1, has five tax slabs of 0 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent.