Friday, 14 July 2017

Pallavi Gupta

All You Need to Know About GST Bill- If You Are a Big Foodie

About GST

After the GST regime started from 1st of July, there had been utter confusion and chaos among the people visiting the restaurants. I've seen people posting their 'Billfie' and welcoming the GST era but most of them are unaware of the taxes which are to be levied and this creates a loophole which amounts to looting of customers by the restaurants.

Some restaurants are having a field day by making customers pay extra in the name of GST. Lets just simplify the process for clearer understanding.

1) Service charge is not a tax. End of story.
Pre-GST, when you ate at a restaurant, as the bill, you had to pay for three prominent entries other than the price of the food items.
Those were the Service Charge, Service Tax and Value Added Tax (VAT).
Let's be clear here, Service charge is not a tax. A restaurant is not legally bound by the government to levy it.

2) What exactly is Service Charge ?
A Service charge is levied by the establishment on it own discretion. Usually, this is around 10% and its mentioned in the menu.
If you don't want to pay it, you don't have to. If the restaurants forces you to pay for it, you can sue the establishments in consumer court.

3) Local dhabas, open air cafes, small food joints, others.
There were two taxes i.e. Service tax and VAT, which now have been replaced by GST.

Now if you are in a Non-AC eatery that doesn't serve alcohol, you have to pay 12% as tax. It is made of Central GST (6%) and State GST (6%). These also apply for local delivery restaurants.

4) None of them have 28% GST slab.
If you are in an AC restaurant, whether it serves alcohol or not, you will have to pay an 18% tax. This is also applicable to Non-AC restaurants serving alchol.

You will have to pay 12% tax if the snacks sold from restaurants are pre-packed and pre-cooked. There are no structures under which you have to pay 28% tax for it.

5) Liquor gets VAT not GST
No GST is levied on liquor or liquor products. However, liquor will attract VAT, as imposed by State govt. So, if you order alcohol and food, you have to pay GST on food and VAT on alcholic beverages.
This is the broad structure of the taxes which are to be levied by the restaurants. Share for awareness and don't let the restaurants fool you in the name of GST.