Seems like a good news is on its way subsequent to Diwali. The Goods and Services Tax (GST) rate on restaurants including luxury hotels is in the cards to be reduced by next month.
GST Council set up a ministerial panel of 5 members who are expected to examine the above-mentioned proposal for reducing tax rates on restaurants.
Since the GST tax regime has created a troublesome impression on consumers, the Council is considering to cut 18% tax on air-conditioned restaurants and 12% on non-air-conditioned.
While working out the GST rate on restaurants, the Council thought through that in the new regime, more tax payback must be available to restaurants, which would help avoid any increase in the tax burden on consumers.
Earlier the Council had originally kept the GST rate on 5 starred restaurants housed in hotels was above at 28% but afterward lowered it to 18% in June 2017.
In the next meeting, the Council is anticipating to examine cutting tax rates on a few other items as well, based on industry representation received so far.
As per the last meeting of GST Council, it was decided to lower tax rates on 27 products, change rules to ease the compliance burden of small and medium enterprises and ease procedures so that exporters’ liquidity improves.