Is it mandatory to pay CGST, SGST both? Know which restaurants can charge tax from customers

Most people, while paying the bill at a restaurant don't even look properly at the bill, those who do, will find that restaurants charge CGST and SGST on the bill. Do you ever wonder if hotels do that? or is there a way to eliminate the taxes from the bill? To understand that firstly, you will have to know what is CGST and SGST. 

What are CGST and SGST?

(Central Goods and Services Tax) CGST is the amount of the tax that goes to the central wallet and (State Goods and Services Tax) SGST is the amount of tax that goes to the state. Different eating outlets or restaurants have different GST rates, such as:

• For non-AC/non-alcohol serving hotels, it is 12%
• For AC/alcohol-serving hotels, it is 18%
• For luxurious or 5-star hotels, it is 18%.

Now, the interesting thing to know is that not all restaurants are eligible for charging customers with GST. This is because of the Composition Levy Scheme. When a restaurant opts for the Composition Levy Scheme, they are not allowed to charge GST. 

The Composition Levy Scheme allows taxpayers whose total turnover in the previous financial year was less than Rs 50 lakh are voluntarily agreeing to pay a fixed percentage of their annual turnover as tax to the government. This amount is paid on a quarterly basis once enrolled into the Composition Levy Scheme.

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How to check the restaurant's Composition Levy Scheme:

• Visit the GST portal https://www.gst.gov.in.
• Click on search taxpayer and search composition taxpayer. 
• Enter the GST number written on the restaurant bill.
• The customer will know whether the restaurant comes under a regular GST payer or is a composite payer. 
• If it is a composite pair then remember not to pay the GST amount levied on the bill. 
• On the other hand, if the hotel is under regular payer then customers have to pay the GST amount.
• If the restaurant is forcibly charging GST in the bill, then you can visit- https://gstcouncil.gov.in/grievance-redressal-committee-grc.