Thanks to GST, eating out is a lot more cheaper

New Delhi, Oct 18: The Indirect tax on restaurant has been reduced substantially due to the implementation of Goods and Services Tax (GST). Indeed, a boon for end-consumer, especially, middle-class people in India.

Thanks to GST, dining out is a lot more cheaper. With the Goods and Service Tax (GST) levy on both AC and non-AC restaurants has come down to 5 per cent from 14.22 per cent. The GST Council, in its 23rd meeting in Guwahati, had slashed the tax rate from 14.22 per cent to just 5 per cent.

However, restaurants will not be able to take the benefit of input tax credit (ITC). Liquor, however, will attract state levies like VAT as it was kept outside the GST regime.

Finance Minister Arun Jaitley, said, "Since they did not pass on the ITC benefit to customers, they will not be eligible for the benefit themselves."

Restaurants inside hotels will also levy 5 per cent GST, except in starred hotels where the tariff is Rs 7,500 or more. The rate for restaurants in starred hotel will remain 18 per cent along with the benefit of input tax credit. Outdoor catering will also be taxed at 18 per cent along with ITC.

Goods and Services Tax (GST) is an indirect tax levied in on the supply of goods and services. GST is levied at every step in the production process, but is meant to be refunded to all parties in the various stages of production other than the final consumer. Goods and services are divided into five tax slabs for collection of tax - 0%, 5%, 12%,18% and 28%. However, Petroleum products, alcoholic drinks, electricity,are not taxed under GST and instead are taxed separately by the individual state governments, as per the previous tax regime.