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Keep these 7 pointers in mind while calculating GST on restaurant bill


Pre-GST restaurant bills had three basic levies over and above total amount charged.

Mumbai: Eating out at cafes or restaurants post the implementation of the Goods and Services Tax (GST) has suddenly become a debatable topic among consumers.

How much GST will eating at a small, roadside dhaba attract? Will GST increase my bill when I eat at a restaurant and order drinks? Am I being overcharged on my total bill? There seems to be a looming question mark over the tax rates printed on restaurant bills.

Restaurant bills prior to the passage of GST had three basic levies over and above the total amount charged for consumption. These are:

Service tax: This was the tax charged on the services of the restaurant.

Service charge: This is charged by restaurants and a customer is not legally bound to pay as per government rules.

VAT: This is the tax on the food consumed.

However, with the rollout of GST, all these levies have been subsumed. From now on, your food bill will only have SGST or State GST and CGST or Central GST.

Here are a few pointers to keep in mind after you have finished stuffing and are looking at your bill:

  1. If you are sitting at a non AC restaurant that does not serve alcohol, you will be charged 12 per cent GST. Local delivery restaurants also fall under this slab.
  2. If you are sitting at an AC restaurant, you will be charged 18 per cent GST, irrespective of whether or not the restaurant serves alcohol.
  3. Non AC restaurants serving alcohol will also charge you 18 per cent GST.
  4. Pre-packed food like namkin, cookies, etc, bought from restaurants will charge you 12 per cent GST.
  5. If you are eating at a restaurants having an aggregate turnover of Rs 75 lakh and that opts for the composition scheme, you will be charged GST at the rate of 5 per cent. These eateries are usually smaller ones.
  6. If you have ordered food and alcohol both, GST will be charged ONLY on your food bill. Potable alcohol does not come under the ambit of GST. It is however subjected to VAT as applied by the respective state government.
  7. No restaurant can charge you GST of 28 per cent.

Moreover, the tax department has urged restaurants, hotels and food eateries to slash prices of food items to pass on the benefit of input tax credit to consumers.

One must also remember that GST will be levied on entire sum of food bill, including service charge.

Source: Deccan Chronicle

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