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Impact of GST on food and restaurant business.
Impact of GST on food and restaurant business.
Hey guys, Are you a foodie? Everybody likes to eat delicious food every now and then. Now, when you eat in a restaurant such as Mcdonalds you see the bill and notice awful lot of tax is charged. You may be wondering what is the significance of the above talks. In this article, we will closely discuss and forsee how GST will affect the restaurant and food business. After GST the food that you eat out any become cheaper.
Today if you revisit your food bill from last week’s fine-dine experience, you’ll find Service Tax, Service Charge, VAT being added over and above the food value. Under the GST regime service Tax and VAT amount will be subsumed into one single rate, but you may still find service charge doing rounds in your food bill.
So assuming a standard rate of 18% under GST, which is most likely, a consumer will save around money. Here we have assumed that VAT is applicable at 100% of the value without any abatement, this may differ in certain states on the basis of the judgements. Furthermore, if we see the effective rate of tax under current regime, it sums up to around 20.5% which will come down to 18% under gst.
Before GST if you eat for Rs. 3000, then you would have to pay tax @20.50% which would nearly cost Rs. 615 but after GST you will just have to pay Rs. 540. Therefore there will be saving of Rs. 75 on you bill.
After you can enjoy your same delicacies with only burning a smaller hole in your pocket then before.
