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GST on Restaurant Bill. Service Charge, AC Type Restaurant still have Ambiguity

GST on Restaurant Bill. Service Charge, AC Type Restaurant still have Ambiguity

Happy that your Restaurant Bill now shows one single Tax as GST. Know Different GST Rates based on Restaurant Type and Dubious Service Charge as added in the bill


GST on Restaurant Food Bill

The Most dubious is the end taxes been added up In Restaurant Bill. In pre GST Scenario – when we went to restaurant having ordered 5 items, came across a bill having 6 taxes added in it :- VAT on Food, VAT on Liquor, Service Tax, Swacchh Bharat Cess, Education Cess, Service Charge.

The Taxes list was longer than the Food Items been ordered.

Thankfully in Post GST Scenario – we can take a look on the Food Items, as single GST (although break down in CSGT and SGST tax breakup) is there. I thought that going to restaurant will be easy on the pocket, But does It look so easy and simple.

Answer is No – The GST is Classified based on Category of Restaurant and Service Charge is still been added up in the bill

Category GST Tax
Small Restaurant (having less than 75 Lakh Turnover) 5%
Non AC Restaurant without Bar License 12%
AC Restaurant or Non AC Restaurant with Bar License 18%

If  you ask for Home Delivery - the same GST Rate will be applicable as mentioned above based on Restaurant Classification


Improvements Needed in GST Framework for Restaurant

However – some Fine Prints  yes needs to be cleared up or Improvements needs for Fine Tuning. I Urge Finance Minister Mr Arun Jaitley (if some one can take it ahead to him) as been a Recommendation and a Voice from someone who is a consumer and has 15 years of experience in Industry to get it implemented.

1. Service Charge is still been continued been charged by Restaurants. Government should make it clear that is it required to be paid or is it optional. What are consumer rights if the same been added up in the bill.

For – making it clear and easy for both Benefit of Consumers and Restaurant Owners – let Government come out clear policy that if the restaurant adding up Service Charge, it should be mentioned – Optional in front of It. Yes - if Restaurant adding up Service Charge - let Optional word to be added ahead of it.

So that - If a consumer is happy about the service – let him tip by paying same and if not – let him not pay. Don’t think that this can be so difficult to make it a change and let it be implemented.


2. GST on Restaurant Type (AC / Non AC / Alcohol Serving): Its mentioned that GST Rates are different for AC Restaurant and Non AC Restaurant. In Winters in North India – the AC is not turned on. Instead – lets make it simple, the way you do on cars having higher GST for Luxury Cars and lower GST for small cars or for Income Tax - higher Tax Slabs for People having higher Income and Lower Tax rates for lesser income.

If the restaurant Bill is more than Rs 1000 (or any amount you deem fit) on a single Table – make it 18% GST, else make it 12% GST. It would be easy to have it rather than having various classifications. Why 5%, 12% or 18% as Multiple rate types on what kind of restaurant it it. It should be simple and bill Specific.

When Alcohol is outside the purview of GST (and VAT been charged) and a separate bill raised for Drinks – then how does it matter for AC Restaurant or Non AC one – it could have been easy for making GST based on bill amount. Who cares about whether the Restaurant turnover is less than 75 Lakh or more than 75 Lakh or why is the AC not switched on in November or February.

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Thursday, 21 June 2018

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