Asked to pay vat while dining out understanding restaurant bills post gst

Asked to pay VAT while dining out? Understanding restaurant bills post GST

Asked to pay VAT while dining out? Understanding restaurant bills post GST . Sooner rather than later, restaurants are likely to pass on the benefit of overall reduced tax rates

Latest News The Goods and Services Tax (GST) is touted as an unparalleled tax reform impacting sectors across the economic spectrum and bringing in immense benefits to stakeholders and consumers. For the common man, what draws attention is the impact of the tax on the bills he or she encounters in his or her daily life, the dining or restaurant bill being one such example. Evidence of the same was seen on social media, which was flooded with selfies of the first mithai bills, restaurant bills, cafĂŠ bills, etc showing the new tax being levied as on July 1, 2017. This radical change, which subsumes a plethora of indirect taxes, has impacted the restaurant business as well, something every diner is inquisitive and talking about. Under the erstwhile indirect tax regime, the restaurant sector was burdened with multiple state and central taxes, charges, and various cesses. On every food and beverages bill, a diner used to pay value added tax (VAT), service tax, various cesses like Swatch Bharat, Krishi Kalyan, and a service charge. The typically applicable VAT rate was between 12.5 to 14.5 per cent and service tax, including cess, was applicable at the rate of six per cent (i.e. 15 per cent on 40 per cent abated value of food). Thus, the total indirect tax on dining was around 18.5 to 20.5 per cent, varying from state to state.