TAP TO UNMUTE Finance Minister Arun Jaitley | Photo Credit: Indiatimes

New Delhi: Dining out will get cheaper as the GST Council has slashed tax rate on restaurants to 5 percent. Currently, an 18 percent GST is levied on AC restaurants, while non-AC restaurants charge 12 percent. However, eateries will not be allowed to avail input credit on tax.

The decision has been taken because it was found that restaurants were not passing on the benefits of input tax credit to customers and were charging GST on previous rates.

Addressing the mediapersons, Finance Minister Arun Jaitley confirmed that all restaurants will come under the 5 per cent tax bracket, irrespective of whether they are AC or non-AC, except those in five-star hotels. Hotels with tariffs over Rs 7,500 per night, however, will be taxed at 18 per cent.

Also Read: GST council slashes rates on 177 items; cement, tobacco, ACs still under the 28% tax slab

Jaitley said that 178 items have been moved from the 28 per cent tax slab to the 18 per cent slab. The new rate will be applicable from November 15.

Thirteen items moved from 18 per cent to 12 percent, 6 items from 18 per cent to 5 per cent, 8 items from 12 per cent to 5 per cent, and 6 items from 5 per cent to nil, Jaitley said.

READ IN HINDI: राहत - 178 वस्तुओं पर GST दर 28 प्रतिशत से घटकर 18 प्रतिशत

He also said the Council had been looking at the 28 percent tax slab and constantly rationalising items it in lesser tax slabs.

Construction-related items such as marble, flooring, etc have also been put in the 18 per cent tax slab. Only 50 goods will stay in the highest slab of 28 per cent.

This is what Hasmukh Adhia said:

Finance Secretary Hasmukh Adhia said the filing of return for 3B will continue up until March. "All taxpayers will continue to file 3B until March 2018," he said, adding that the fine for late filing will be cut to Rs 20 per day from Rs 200 for nil liability tax filer.

The GST Council also decided to raise the Composition Scheme threshold to Rs 2 crore.

Adhia said taxpayers with turnover less than Rs 1 crore should file invoices every quarter and those above Rs 1 cr should file invoices every month.

"The Council may have to take another look at forms for GSTR 1, GSTR 2 and GSTR 3. All taxpayers to file only GSTR-1 in current year," he added.

In a major decision, the GST Council has decided to keep only 50 out of 227 items in the highest tax slab of 28 percent. The rates on the major 177 items have been slashed from 28 percent to 18 percent.

The 50 items that will still fall under the purview of 28 percent tax slab include cement, tobacco, and air-conditioners among others.

Reports suggest that the Rate Fitment committee had proposed keeping 68 items in the bracket, which may result in revenue loss of Rs 20,000 crore.

All types of chewing gum, chocolates, preparation for facial make-up, shaving and after-shave items, shampoo deodorants, washing powder detergent and granite and marble will attract lower 18% tax rate. However, paints and cement have been retained in the 28 percent tax bracket, he said.

The 23rd meeting of the council was held in Guwahati, Assam. The council, comprising state finance ministers, was set up to review the GST returns filing cycle and make it taxpayer friendly.

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