GST: Eating Out Gets Cheaper, But Drinking Out  may not

By GSTBazaar

7th July 2017

 

GST implementation has some changes in the Indian economical system People now need to be aware of the things they need to pay more or less. India has got its new taxation system where there less complexity and multiplicity.

Goods and services tax (GST) regime will make eating out more cheaper as the GST rates after are lower than the earlier tax rates. Like people have to pay 18% tax which was 20.1% earlier. But drinking out will hike under GST. Since, Liquor has been out of GST ambit creating some discrepancy and confusion on liquor. Previous system of value-added tax (VAT) will be applicable on liquor. Due to this tax rates on liquor will vary state to state by making cheer short-lived. Liquor Companies do not need GST registration Since, Liquor is out of it 

There is a report that Liquor companies will raise prices and as per that restaurants may be forced to follow suit. It is expected GST introduction will affect the company negatively in the short term as it won’t get input credit and the cost is expected to go up 7-9%.This is the reason  Restaurants and bars will have to raise liquor prices. As minimum increase of 12-15% in the menu price for liquor being served in restro and bars. Therefore drinking out in a restaurant will become more expensive. According to GST supply of food and liquor will have to charge GST of 18%. People are paying taxes on liquor that do not have credit on.Due to this restaurants will have to increase the prices by the amount of taxes which they have to now absorb.

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GST: Eating Out Gets Cheaper, But Drinking Out  may not

2017-07-07