The Finance Ministry on Saturday announced that strict action will be taken against restaurants that are overcharging patrons despite a reduction in the Goods and Services Tax (GST) from the earlier 18 per cent to 5 per cent.
“As far as big chain of restaurants are concerned, if they’ve uniformally raised prices, we’ll ask them what their Input tax credit was which they don’t get now,” Hasmukh Adhia, Finance Secretary told ANI.
“If Input tax credit mismatches with prices raised anti-profiteering action will be taken against them,” added Adhia.
Adhia further said customers know that in their bill the government is charging only 5 per cent tax.
On November 15, GST on 178 goods was lowered to 18 percent from 28 percent as part of rationalisation approved by the GST Council.
It was slashed to 5 percent from 18 percent for all standalone restaurants irrespective of whether they were air-conditioned or otherwise, without input tax credit.
However, despite the reduction some restaurants are not passing on the benefit to customers and are indulging in overcharging. The culprits include some of the big chains that have presence across the country.