The restaurants and bars imposed a new VAT rate on alcohol.
Liquor bills (excluding food) at bars and restaurants only attracted a 4.94 percent service tax that was introduced by the Union Government last year. Now, the customers will have to pay an additional 5.5 percent VAT charges on their drinks, taking the total tax component on liquor bills to close to 11 percent.
An estimate by restaurant and bar owners suggests that the average liquor bill per person in the age group of 21 to 25 years is between Rs 500 and Rs 1,000. For this segment the VAT levy alone will result in an increase of Rs 27.50 to Rs 55 on liquor bills.