Eating out might get cheaper after 15 Nov as the Finance Minister Arun Jaitley has declared a reduction in GST rates on over 200 items. The initial GST rates for air-conditioned restaurants was 18% and for non ac restaurants was 12% but now it has been slashed down to 5% on all food items. VAT (Value Added Tax) will continue to be charged for alcohol. Alcohol still does not follow under GST.
The President of Delhi Hotel and Restaurant Owner’s Association Sandeep Khandelwal has welcomed the new tax rates as this may encourage people to enjoy restaurants and pay taxes. People will now pay taxes as this will be cheaper than trying to bribe their way out of it. However, restaurants will not get back input tax credit (ITC). It makes taxes already paid on raw materials deductible from the final tax amount. This might push the menu prices up by 10%.