In a special midnight Parliament session, India witnessed the launch of Good and Services Tax (GST) on June 30. With the rollout of GST, which is said to be the biggest tax reform since India’s Independence, there is a good news for food lovers as now they will have to pay less on their next visit to restaurants. The new tax regime will have a considerable impact on services provided by hotels on food and alcohol with a reduction in the tax slabs on it. According to The Indian Express report, the tax on food and drinks in both air-conditioned and non-air-conditioned restaurants will drop. The tax on AC restaurants will drop from 20.5 per cent to 18 per cent, while it will be reduced to 12 per cent for those who do not have the facility of air-conditioning. There was also a six per cent service tax on liquor across all segments that has now been withdrawn under GST.
Before GST, customers had to pay a tax component consisting VAT and service tax. They had to pay 14.5 per cent VAT along with six per cent service tax. But after GST rollout, the restaurants having a licence to serve liquor (with full ITC) will levy a tax of 18 per cent instead of 20.5 per cent. The tax slab of 12 per cent is for those who do not have the facility of air-conditioning or central heating at any time during the year along with not having a licence to serve liquor (with full ITC). However, The 5-star hotels will come under the highest slab of GST, which is set at 28 per cent.
WATCH | Cabinet Ministers laud GST rollout
The GST was launched in the presence of President Pranab Mukherjee, Prime Minister Narendra Modi, vice president Hamid Ansari, finance minister Arun Jaitley and Lok Sabha Speaker Sumitra Mahajan on stage. The Central Hall of Parliament was packed with ministers and dignitaries ahead of the much-awaited launch that took place at midnight. Before this, the PM addressed the gathering visited Parliament to witness the historic moment. In his speech, Modi called GST as ‘Good and Simple Tax’. He said that it will not only ease the process of doing business but will also improve the way of doing business. GST will play an important role in achieving the goal of New India, said the PM.