CHANGE IN GST

The next time you go to restaurants you will have to pay a uniform GST rate of 5 per cent, instead of 12 per cent or 18 per cent earlier depending on AC or non-AC restaurants. This was decided at the 23rd meeting of the GST Council meet today in Guwahati. But restaurants won't get the benefit of input tax credit, a facility to set off tax paid on inputs with final tax. Currently, GST is levied at 12 per cent on food at non-AC restaurants, while it is 18 per cent for air-conditioned ones with input tax credit benefit for restaurants. 

Finance Minister Arun Jaitley, addressing a press conference, said that the Council was of the view that most restaurants did not pass on the benefits of input tax credit to customers by reducing prices after GST was implemented from July 1.

Experts said that it needs to be watched how restaurants price their food after removal of input tax credit benefit. Restaurants currently get input tax benefit on rent, food and other items.

"Five per cent rate on restaurants (except those in star hotels) without any input credit might not be the best decision from a tax policy standpoint and breaks the chain (of input tax benefits), which is not desirable. From a consumer standpoint, however, it should lead to some decrease in prices particularly in case of small restaurants," said Pratik Jain of PwC. "This decision seems to be based on government's belief that the industry has not passed on the input credit benefit to customers."  

GST Rates Reduced from 18% to 5% on 10-11-2017

  1. Puffed rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, kuliya
  2. Flour of potatoes put up in unit container bearing a brand name
  3. Chutney powder
  4. Fly ash
  5. Sulphur recovered in refining of crude
  6. Fly ash aggregate with 90% or more fly ash content

GST Rates Reduced from 12% to 5% on 10-11-2017

  1. Desiccated coconut
  2. Narrow woven fabric including cotton newar [with no refund of unutilised input tax credit]
  3. Idli, dosa batter
  4. Finished leather, chamois and composition leather
  5. Coir cordage and ropes, jute twine, coir products
  6. Fishing net and fishing hooks
  7. Worn clothing
  8. Fly ash brick

GST Rates Reduced from 5% to nil on 10-11-2017

  1. Guar meal
  2. Hop cone (other than grounded, powdered or in pellet form)
  3. Certain dried vegetables such as sweet potatoes, maniac
  4. Unworked coconut shell
  5. Fish frozen or dried (not put up in unit container bearing a brand name)
  6. Khandsari sugar

Changes in GST Rates for Goods on 06-10-2017

  • Mangoes sliced dried from 12% to 5%
  • Khakra and plain chapati / roti from 12% to 5%
  • Food preparations put up in unit containers and intended for free distribution to  economically  weaker sections of the society under a  programme duly approved by the Central Government or any State Government, subject to specified conditions [Foot note 1]
  • Namkeens other than those put up in unit container and, –
    • (a) bearing a registered brand name; or
    • (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily [Foot note 2] from 12% to 5%
  • Ayurvedic, Unani, Siddha, Homeopathy medicines, other than those bearing a brand name [Foot note 3] from 12% to 5%
  • Paper waste or scrap from 12% to 5%
  • Plastic waste, parings or scrap from 18% to 5%
  • Rubber  waste, parings or scrap from 18% to 5%
  • Hard Rubber waste or scrap from 28% to 5%
  • Duty credit scrips from from 5% to NIL%
  • Real Zari  from 12% to 5%
  • Cullet or other waste or scrap of Glass from 18% to 5%
  • E-Waste from 28%/18% to 5%
  • Biomass briquettes from 18% to 5%

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