Eateries hope for better business with updated GST

The Centre's move to reduce existing Goods and Services Tax (GST) on eating out in Air Conditioned (AC) restaurants, to 12 per cent, has acted as a balm for many industry players.

Still reeling from the dual onslaught brought about by last year's demonetization and GST, businessmen are hoping to finally recover losses and make some profits.

Under the current slab, air conditioned restaurants charge 18 per cent GST while the non-AC counterparts have 12 per cent as the rate.

The proposal to unify the tax will be examined by a five-member ministerial panel set up by the federal indirect tax body, the GST Council, and if finalised, is likely to be rolled out in November.

Meanwhile, restaurants in the capital have welcomed the move, reasoning that apart from buoying their business, it would also address the lack of clarity in defining AC and non-AC outlets.

Talking to DNA, Goumtesh Singh, Co-Partner, Raasta? said, "It's a positive step, as we need some leeway as an industry from the government. The past year has seen many decisions and implementations, which will obviously professionalise the industry, but are also bringing some challenges."

He added, "Considering the amount of employment the industry generates, as well as creates so much positive impact across stakeholders, we do welcome this step. Also, this will lower overall bills, and encourage eating out."

For Rohit Malhora, Business Head, Barcelos India, "It will be a small protection to industry. Last year, November hasn't been very good because of demonetization, liquor ban, service charge issue and GST, back-to-back in one year put the industry on the back foot. Reducing GST will certainly impact consumers."

On the other hand, some are also of the opinion that restaurants in luxury hotels must also be included in the same slot. Ankur Bhatia, Executive Director, Bird Group of Companies avers, "We welcome the move but it should extend to the entire industry. Luxury properties as well as restaurants inside them should also be brought under the uniform umbrella. There should not be any bias."

Change in rates

• Under the current slab, AC restaurants charge 18% GST; non-AC counterparts have 12%. 
• Now, air conditioned restaurant’s rate has been reduced to 12%