Dining at AC restaurants could become more affordable, with the GST Council considering a reduction in the GST on AC restaurants. Under the current GST norms, AC restaurants are charged a GST of 18 per cent, with this likely to be reduced to 12 per cent next month.
The government had recently reduced GST rates on a number of products, with demands coming in from various sections to cut the rate on eating out as well.
Restaurateurs from across the country have seen a dip in customers, with eating out becoming an expensive proposition for many. While non-ac restaurants are charged a GST of 12 per cent, AC restaurants have to pay 18 per cent, with most restaurants passing the entire burden onto their customers.
There have also been instances where restaurants have been accused of utilising the input tax credit provision for their own benefit. This provision enables restaurants to claim credit for any tax they paid while purchasing raw materials.
A group comprising the finance ministers (FMs) of different states will meet to discuss this issue. Members include Assam finance minister Himanta Biswas, J&K finance minister Haseeb Drabu, Punjab FM Manpreet Singh Padal, Bihar deputy chief minister Sushil Modi, and Amar Agrawal, Chattisgarh’s minister of commercial taxes.
The group will look into the GST for ac restaurants, however, those restaurants operating out of 5 star properties might not be considered for a drop in rates.
A final decision is expected to be taken when the GST Council meet in Guwahati on November 9.
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