Revenue Secretary, Hasmukh Adhia, has sent out a directive urging restaurants, hotels and other eateries to slash prices of food items on their menus, and pass on the benefits of input tax credit, to customers under GST.
Mr Adhia, also said that GST would be levied on the entire bill amount which would include service charge charged at a restaurant, however VAT would be charged on alcohol and alcohol products.
“Most of the restaurants should revise downward the rate charged on food items in their menu because of ITC which is now available. So, ITC should be accounted for now in form of reduction in the value of supplies which they are giving,” Adhia spoke in GST Master Class.
Under the new tax regime, non-AC restaurants will attract levy of 12% while AC restaurants along with those serving liquor would be charged 18% GST.