The government may soon start levying tax at a lower rate of 12% for both air-conditioned and non-AC restaurants. At present, restaurants that have air conditioners charge a Goods and Services Tax rate of 18% on food bills while the non-AC ones levy 12% tax.
“There is consensus that there is no need for a distinction between AC and non-AC restaurants. It can only create confusion,” an unidentified official told Mint after the Goods and Services Tax Council meeting on Sunday. The final decisions are likely to be taken at the GST Council meeting in Guwahati on November 9.
However, the five-member panel said that AC restaurants at five star or above rated hotels should be taxed at 18% GST. The council had initially kept such restaurants under the tax bracket of 28%, reported Moneycontrol. Later, it was lowered to 18%.
The members of the ministerial panel are Assam Finance Minister Himanta Biswa Sarma, Bihar Deputy Chief Minister Sushil Kumar Modi, Jammu and Kashmir Finance Minister Haseeb Drabu, his Punjab counterpart Manpreet Singh Badal and Chhattisgarh Commercial Taxes Minister Amar Agrawal.
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