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Eateries should cut rates of food items post GST: Adhia

Press Trust of India  |  New Delhi 

Restaurants, hotels and eateries should cut rates on food items in their menu to reflect the benefit of being able to set off paid on inputs under GST, Secretary Hasmukh Adhia said today.

He also said that will be levied on entire sum of food bill, including service charge, in a restaurant, while the value of alcohol or alcohol products consumed will attract VAT.

Previously, a service was levied on the bill. But the the hotel or restaurant operators paid on inputs could not be set off against the on final bill. This facility, called input credit (ITC), is available in the Goods and Services (GST) regime.

"Most of the restaurants should revise downward the rate charged on food items in their menu because of which is now available. So should be accounted for now in form of reduction in the value of supplies which they are giving," Adhia said in Master Class.

Under the regime, while non-airconditioned restaurants attract 12 per cent tax, AC restaurants and those serving liquor will attract 18 per cent.

Adhia further said that anything that is served as part of restaurant bill will be subject to GST, barring alcohol on which Value Added (VAT) will be levied.

"On the entire value of food bill, including service charge, on that portion also will apply," he said.

Adhia further said that the department has received representation for transition provision of lease service industry. As per the provisions, will not be available for central excise already paid on cars which are on lease.

"There are a lot of representations on this about transition for lease service industry. We are looking at the representation but we are not sure how to handle this," Adhia said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, July 11 2017. 19:33 IST