Consumers to pay less in restaurants as GST reduces to 5 per cent effective tomorrow

Restaurants and eateries aim to regain the loss as GST on food reduces from 18 per cent to 5 per cent

Consumers to pay less in restaurants as GST reduces to 5 per cent effective tomorrow

A Few months ago, PM Narendra Modi’s government had implemented 'Goods and Services Tax' (GST), which startled everybody in the nation. While the consumers worried about paying more for the services, people involved in business worried about the taxes and divisions.

But eventually, after the unrest grew across the nation, the government revised the taxes for some categories. In a recent announcement, GST for restaurants was also reduced from 18 per cent to 5 per cent and so consumers eating out will now pay slightly less than before. 

Talking about the same, Dilip Datwani, president, Hotel & Restaurant Association Western India (HRAWI), a leading association of hotels, said, “The reduction in GST is a huge relief. Hoteliers should absorb the losses incurred on account of withdrawal of ITC (Input Tax Credit). The aim of the government behind the GST cut is to encourage patrons to eat outside.”

Adding to the same, Adarsh Shetty, president, Indian Hotels and Restaurant Association (AHAR) also said that the reason for an increase in rates over the last few months is due to the operational costs and raw materials. The association might reduce the prices even further if the other costs go down.

Reports mention that due to the implementation of GST, the hotels have seen a fall in business by around 30 per cent and home delivery business has also been affected by around 80 per cent , as the respective businesses had to pay 12 per cent to 18 per cent taxes depending on the restaurants (AC and Semi AC respectively). With this new change in the taxes, the aim of the hotels will be only to bring their business back to normal.