City restaurateurs unhappy with possible change in GST

Rujuta Parekh
Saturday, 21 October 2017

According to restaurant owners, there is still a lot of confusion with regard to the newly introduced tax regime and taxation at restaurants among people and this change will only lead to more confusion.

Pune: While news is afloat that the Goods and Services Tax (GST) Council is set to reduce the GST incurred on restaurant bills from 18 per cent to 12 per cent while taking away the benefit of Input Tax Credit (ITC) for restaurants, city restaurateurs have expressed discontent about the possible change.

According to restaurant owners, there is still a lot of confusion with regard to the newly introduced tax regime and taxation at restaurants among people and this change will only lead to more confusion.

Speaking to Sakal Times, the President of Pune Restaurants and Hoteliers Association (PRAHA), Ganesh Shetty, said that while the news is not confirmed yet, they are unhappy if such a decision is taken. “One part of it is that this debate of 18 per cent or 12 per cent taxation stands for air-conditioned and non-airconditioned restaurants. But, there is no clarity on the probable revised tax structure for permit rooms,” he stated.

He further added that they also firmly stand against the decision to withdraw the benefits of ITC from restaurants. “I do not know where the government has got inputs that the restaurateurs are not passing on the benefits of the ITC they can claim to the customers. We have not increased the prices of our products even though the taxation on us has increased under the GST regime. We further have been giving five to 10 per cent discounts to consumers on each bill,” he explained. 

According to him, the restaurateurs have bills to prove that the benefits have been passed on to the consumers. “ITC must be provided as previously we had less taxation and a one or two per cent rise in taxation is okay but this was a substantial rise. If the consumers are happy with the tax structure, we too are happy. If the consumers want the taxation to be reduced to five per cent or 12 per cent, the government can decide but they should not take away the benefit of ITC from us in this equation,” he explained.

Another restaurateur from the city stated that people are only now settling down and completely understanding the tax structure and if any changes are brought around again, there will be a lot more confusion and a lot of time will be consumed once again in getting acquainted with the revised tax rules. 

Related News