1. GST impact on restaurant bills: Do not let eating outlets fool you; here is how much you have to pay

GST impact on restaurant bills: Do not let eating outlets fool you; here is how much you have to pay

The complex nature of GST has given an opportunity to the restaurant owners to cheat their customers by making them pay extra. Here's everything you need to know to be on the smarter side

By: | New Delhi | Updated: July 15, 2017 4:37 PM
GST impact on restaurant bills, GST impact on restaurant, GST impact, GST, Goods and Service Tax, GST bills, how does a GST bill look like, How much bil to pay after GST, GST impact on hotels, GST impact on cafes, GST impact on eating outlets, economy news, latest news GST impact on restaurant bills: No GST is levied on liquor or liquor products. (Source: IE image)

So, it’s been over weeks now since the historic Goods and Service Tax or GST was implemented in India at a historic midnight bash at the Central hall of the Parliament in New Delhi. Under the new tax regime, the products have been put into five categories: those who have been exempted from tax, 5%, 12%, 18% and 28%. Pre-GST, eating at a restaurant was easy. You have your food, you pay the bill and you leave. Back then, you had to pay three extra charges: the Service Charge, Service tax and Value Added Tax (VAT). However, the complex nature of GST has given an opportunity to the restaurant owners to cheat their customers by making them pay extra. Here’s everything you need to know to be on the smarter side:

First of all, the service charge is not a tax. The government has not ordered any restaurant to levy service charge and they do it on their own. Usually, this amount is 10% of the price of food products that you order but if you don’t want to pay, you don’t have to. It is completely customer’s call whether they want to pay the service charge or not. In case the restaurant forces you to pay for it, you can sue the establishment in consumer court.

Coming to the tax apart, you have two pay two taxes: service tax and Value Added Tax. Both of them have now been replaced by GST. If you are eating in a Non-AC restaurant, you have to pay 12% as tax. It is made of Central GST (6%) and State GST (6%). The same rates also apply for local delivery restaurants. However, if you are in an AC restaurant, you will have to pay 18% tax irrespective of the fact that it serves alcohol or not.

You will have to pay 12% tax if the snacks sold from restaurants are pre-packed and pre-cooked. What you must know is that no GST is levied on liquor or liquor products. However, liquor will attract VAT, as imposed by your state. So, if you order alcoholic beverages and food, you pay GST on food and VAT on alcoholic beverages.

  1. S
    Shabeer
    Jul 31, 2017 at 10:29 am
    What will be the new taxes for a packaged meal where food and liquor is included in an AC restorent?
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      Harmeet Singh
      Jul 17, 2017 at 8:37 pm
      Restaurants in Bangalore have started charging the whole of GST since july 1st without reducing the erstwhile VAT and service tax. If an item was sold Rs 100 on June 30th, from July 1st it has become Rs 118. This is not how GST had to be implemented.What can we do to stop this malpractice. Restaurants in effect have hiked close to 16 to 24 of charges in the name of GST implementation.
      Reply
      1. S
        Suresh
        Jul 15, 2017 at 9:28 pm
        If restaurants r registered under composite category and not general. They will charge 5 percent. U cn see cert on display.
        Reply
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          Rajendra Bongale
          Jul 15, 2017 at 8:26 pm
          I am from Pune. BAKARWADI is one of the famous eating item from Pune.and Chitale Bandu are the famous for that. they use to sell this food item for Rs.280/- per kg before GST, which includes all taxes of state as well as central taxes. Now when GST is applied, then definitely all the previous taxes gone and GST is applicable. But the Chitale Bros, increased the the price after GST to Rs.300/- per kg.Actually it should have gone down as the previous rate was Rs.280/- per kg which includes state and central taxes.now they have gone and GST is replaced.One must also remember that the raw materials(food items fall in for 0 ) in new GST.Is should have been Rs.280/- minus all the previous state and central tax) then GST on after deducting previous taxes. Will the GST authority take note of this and seek clarification from Chitale Bros of Pune?
          Reply
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            Shahid Ullah
            Jul 15, 2017 at 3:13 pm
            Restaurant is forced to Levy EXTRAS in a form of VAT OR SVCE TAX N FLEECE CUSTOMER. MANY R NOT AWARE.ESPECIALLY THOSE COMING FROM ABROAD. WHO IS THERE 2CHECK N WHAT TO DO IN CASE THIS HAPPEN. GOVT INGNORES, BECAUSE IT HAS RECD. IT'S SHARE N SO DO STATE. IN THAT CASE CUSTOMER IS AT LOSS. TO FILE A CASE, ITS A LENGTHY AFFAIR N TEDIOUS PROCESS.MEANWHILE IF A CASE IS FILED N AUTHORITIES VISIT THE RESTAURANT,THE OWNER BRIBES THE AUTHORITIES N IN LIEU THEY WILL SHOW THE WAY 2 MANIPULATE . EVERYTHING IS POSSIBLE.
            Reply
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              ASHISH KHERA
              Jul 15, 2017 at 2:52 pm
              I don't understand the intelligence of SC who gave this verdict that it's up to customer to pay service tax. What the fun it is!!!! If we have the decide which tax to pay then for what purpose SC is there.It should be either complete yes or complete No.And pl the option of consumer court is not every body's cup. Of tea.
              Reply
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                Shreyas Vaidya
                Jul 15, 2017 at 6:45 pm
                You are confusing service tax with the service charge. Service tax along with VAT which is now replaced by GST was compulsory and Not service charge! Service charge is the extra amount levied by restaurants on the total bill, which you can refuse to pay!
                Reply
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