Hotline: 1800 102 2007
X
Loading
Search Business Opportunities
Jul, 12 2017

Hotels, Restaurants should reduce prices of food items after GST, says Hasmukh Adhia

GST will be levied on entire sum of food bill, including service charge, in a restaurant, while the value of alcohol or alcohol products consumed will attract VAT.

Revenue Secretary, Hasmukh Adhia, said that restaurants, hotels and eateries should cut rates on food items in their menu to reflect the benefit of being able to set off tax paid on inputs under GST.

He said, "GST will be levied on entire sum of food bill, including service charge, in a restaurant, while the value of alcohol or alcohol products consumed will attract VAT."

Previously, a service tax was levied on the bill. But the tax the hotel or restaurant operators paid on inputs could not be set off against the tax on final bill. This facility, called input tax credit (ITC), is available in the Goods and Services Tax (GST) regime.

In the GST Master Class, Adhia said, "Most of the restaurants should revise downward the rate charged on food items in their menu because of ITC which is now available. So ITC should be accounted for now in form of reduction in the value of supplies which they are giving."

Under the GST regime, while non-air conditioned restaurants attract 12 per cent tax, AC restaurants and those serving liquor will attract 18 per cent.

Adhia further said that anything that is served as part of restaurant bill will be subject to GST, barring alcohol on which Value Added Tax (VAT) will be levied.

He said, "On the entire value of food bill, including service charge, on that portion also GST will apply."

Adhia further said that the tax department has received representation for transition provision of lease service industry. As per the GST provisions, ITC will not be available for central excise already paid on cars which are on lease.

He said, "There are a lot of representations on this about transition for lease service industry. We are looking at the representation but we are not sure how to handle this."

Comment
Related opportunities
  • About: Conceptualized as a reflection of Indian cuisine and culture, Laat..
    Locations looking for expansion Delhi
    Establishment year 2017
    Franchising Launch Date 2017
    Investment size Rs. 50lac - 1 Cr.
    Space required 300
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater New delhi Delhi
  • Juices / Smoothies / Dairy parlors
    About:Milkshake & Co a progressive venture of Kaira luxury beverages private..
    Locations looking for expansion New Delhi
    Establishment year 2000
    Franchising Launch Date 2017
    Investment size Rs. 20lac - 30lac
    Space required 150 - 175 Sq.ft
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater South Delhi New Delhi
  • Web based/Online Platform
    About: INDIA’S LEADING INNOVATIVE VEHICLE TRACKING PLATFORM:- iWay Track is an IT..
    Locations looking for expansion Maharashtra
    Establishment year 2010
    Franchising Launch Date 2017
    Investment size Rs. 5lac - 10lac
    Space required 200
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Mumbai City Maharashtra
  • Tea and Coffee Chain
    Cafechocolicious brings a proven business model to start in Coffe..
    Locations looking for expansion Maharashtra
    Establishment year 2015
    Franchising Launch Date 2015
    Investment size Rs. 10lac - 20lac
    Space required 150-200sq-ft
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Pune Maharashtra
Insta-Subscribe to
The Franchising World
Magazine
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities