The most comprehensive overhaul of GST rates decided at a recent GST Council meeting, reducing tax on all restaurants to 5 per cent and slashing tax on 178 items, became effective from Wednesday as the government issued notifications to this effect.
Eating out is expected to become cheaper as all restaurants outside high-end hotels charging up to Rs 7,500 per room have uniformly come under the 5 per cent GST bracket from Wednesday, according to the gazette notification.
The facility of input tax credit for restaurants has, however, been withdrawn as they had not passed on this benefit to consumers.
Restaurants in hotels with rooms above Rs 7,500 per day would continue to pay 18 per cent GST with the benefit of input credit.
According to the notifications, the GST has been cut on a host of consumer items such as chocolates, chewing gums, shampoos, deodorants, shoe polishes, detergents, nutrition drinks, marbles and cosmetics.
Only 50 products, including luxury and sin items, white goods, cement and paints, automobiles, washing machines, air conditioners, aeroplane and yacht parts have been retained in the top 28 per cent slab.
Scientific and technical equipment supplied to public-funded research institutions will now attract a concessional GST rate of 5 per cent.
“This major revamp will benefit the consumer provided the FMCG players reduce the prices of the products speedily,” GST expert Pritam Mahure told IANS.
The Goods and Services Tax (GST) Council on November 10 removed 178 items from the highest 28 per cent category while cutting the tax on all restaurants outside starred-hotels to 5 per cent, but withdrew input credit facility for them.