Non-AC area at AC restaurant charges 18% GST on food takeaway

Non-AC area at AC restaurant charges 18% GST on food takeaway
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Story Dated : August 14, 2017

In a clarification which signals more burden on your pocket the next time you go to an AC restaurant, the Central Board of Excise and Customs (CBEC) said a uniform GST rate of 18 per cent would be charged on takeaways as well as food served from a non-AC area of a hotel or restaurant if any of its part has a facility of air conditioning.

The new Goods and Services Tax (GST) regime, which was rolled out from July 1, provides for levy of 12 per cent on food bill in non-AC restaurants.

However, the CBEC said in case the first floor area of the restaurant is air-conditioned and used for serving food and liquor while the ground floor only serves food and is non-AC,  tax will have to be charged at 18 per cent irrespective of from where the supply is made, first floor or second floor.

“If any part of the establishment has a facility of air conditioning, then the rate will be 18 per cent for all supplies from the restaurant,” it said.

The tax rate for AC restaurants and those with liquor licence will be 18 per cent while 5-star hotels will charge 28 per cent GST.

With regard to tax rates that would be charged for take-away food from such restaurants, the CBEC said, “Tax has to be charged at 18 per cent on supplies of food made from their takeaway counter.” Besides, such restaurants are also not eligible for the composition scheme as they are engaged in supplying liquor.

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