Effect of GST on Liquor, to be 6% Cheaper at Eateries

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As we all know GST has turned a range of all products and services dearer. Now from 1 july 2017 with the withdrawal of service tax liquor will be available at the 6% cheaper rates at restaurants and bars.

Eating in  restaurants will be lighter on the pocket after GST as the tax on food in air conditioned restaurants drops from 20.5% to 18% that will give  direct benefit  to you. On the other hand eating out in non air conditioned restaurants will levy 12% tax on  all food and drink. The tax component includes 14.5% VAT and a 6% service tax.

Service tax on liquor all across the segments is 6% but now it has been withdrawn. ” Decrease in liquor prices will rise in turnout. Now, Food will also be cheaper and even the reduction in prices is small but still it is  an inducement. From the last few years eating out in restaurants has been going out expensive day by day but this is a very fresh  turnaround for all those who love to eat outside.” said Sudesh Poddar who is the president of the Hotel and Restaurants Association of Eastern India.

In fact, Many restaurants have already  deferred their annual rate revision for GST. The owner of Oasis restaurant on Park Street, Pratap Daryanani said, “annually we do not revise liquor prices, while the food prices raised by 5% to 10% every year for the sake of inflation. But for this year we have been waiting for the GST to take effect.”

He added,  that the taxes have been slashed and it will be fair to let our patrons enjoy the benefit. It should make more people rush towards the restaurants.

still many peoples wary about the new tax structure, and they admit that this decrease in tax was just what the food and beverages sector badly needed. ” It does not affect us in any manner since now we will be collecting less and paying less to the government and on the whole  our profit and prices margin remain unchanged, it only makes a difference to our patrons. Now we are ready with a new software which will roll out on Saturday,” said Nitin Kothari, the owner of Mocambo and Peter Cat.

Hrishi Bajoria, owner of Chili’s said, ” very few things seem unclear about GST and one good thing we are looking ahead is tax relief.”

Not everyone have waited for GST to revise their prices persons  like Song Hay revised their food prices,  last week before GST and said, ” we could not wait any more for the rise in operational costs. But still our patrons will benefit since we would have revised prices.” Most of the restaurants and bars revise their prices every year either in April or before the pujas. But, this year, most have chosen to do it in July after GST. A restaurant owner felt that it will provide more psychological relief to their consumers.  he said,” As the food will be cheaper, you will now be paying the amount  that will be displayed on the menu card for liquor, As  the service tax is removed drinking will cost less.”

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