Hotline: 1800 102 2007
X
Loading
Search Business Opportunities
Nov, 14 2017

ICRA welcomes GST cut on restaurants

Currently 12 per cent GST on food bill is levied in non-AC restaurants and 18 per cent in air conditioned ones

Rating agency ICRA welcomed the decision to levy 5 per cent GST on all restaurants, both air-conditioned and non-AC, saying the revision in rates is positive and will bring down the dining-out cost. Last week, the GST council lowered the tax rate of restaurants to a uniform 5 per cent from 12 per cent on non-AC restaurants and 18 per cent on air-conditioned ones.

ICRA Vice President and Sector Head Pavethra Ponniah said “This revision in GST rate for restaurants is positive, as it would bring down the dining-out cost, supporting footfalls and revenues at a time when most organized restaurants are struggling to grow demand. As most major inputs for restaurants like grains (not packaged), vegetables, poultry and seafood are exempt from GST, the input credit advantage available for restaurants was negligible. Restaurants were also not passing on any benefit of input tax credit to the consumers under GST.”

Currently, 12 per cent GST on food bill is levied in non-AC restaurants and 18 per cent in air-conditioned ones. All these got input tax credit, a facility to set off tax paid on inputs with final tax.

The council said the restaurants, however, did not pass on the input tax credit (ITC) to customers and so the ITC facility is being withdrawn and a uniform 5 per cent tax is levied on all restaurants without the distinction of AC or non-AC.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 5 per cent GST but will not get ITC.

Comment
Related opportunities
  • Computer and ICT Services
    About: Developed by Vidhya Management Services Pvt. Ltd., Quikfee is an..
    Locations looking for expansion Delhi
    Establishment year 2016
    Franchising Launch Date 2017
    Investment size Rs. 50 K - 2lac
    Space required -NA-
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater New delhi Delhi
  • Dairy/F&V Stores
    About Us : Moo Cow was started aiming to be the bigest..
    Locations looking for expansion Delhi
    Establishment year 2010
    Franchising Launch Date 2011
    Investment size Rs. 1 Cr. - 2 Cr
    Space required 100
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater New delhi Delhi
  • Quick Service Restaurants
     Great profit making opportunity   An innovative QSR brand FOOD 365 by..
    Locations looking for expansion Maharashtra
    Establishment year 2017
    Franchising Launch Date 2017
    Investment size Rs. 2lac - 5lac
    Space required 200
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Haveli Maharashtra
  • About Us:  MBTA (Mahesh Bhupathi Tennis Academy) was founded in 2006,..
    Locations looking for expansion Karnataka
    Establishment year 2006
    Franchising Launch Date 2017
    Investment size Rs. 50lac - 1 Cr.
    Space required 2000
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Bangalore Karnataka
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