Chennai: Eating out will not be so costly anymore with a suggestion coming before the government to bring down the Goods and Services Tax (GST) rate to 18 per cent for all restaurants. Hotel associations appear to be elated over the proposal. The Group of Ministers (GoM) constituted to make the composition scheme more attractive, has suggested that GST for hotels, which have room tariffs of over Rs 7,500 per night should be reduced to 18 per cent from the current level of 28 per cent and 12 per cent for restaurants in hotels with a tariff below Rs. 7,500 per night.
The hospitality sector has been complaining that the high rates were affecting their business. The GST on restaurants in five-star and luxury hotels had been earlier reduced from 28 to 18 per cent, bringing it at par with standalone air-conditioned restaurants. Food & beverages constitute 30-40 per cent revenue for five-star hotels.
But it remains to be seen if these restaurants are also brought into the 12 per cent bracket. GST composition scheme is open for manufacturers, restaurants and traders whose turnover does not exceed Rs.1 crore. This threshold was earlier Rs. 75 lakh and the GST Council had this month raised it to Rs.1 crore from October 1 so that more traders and manufacturers could benefit from this scheme which is easy to comply with as it does not require much paperwork.
