The GST tax rate for restaurants has been reduced from 18% to 5%. Here at Evoma, we have reduced restaurant rates, and are thankful to the GST Council for the reduction in GST tax rates for restaurants. We have slashed our own prices, and the benefits accruing from this reduced tax rate are accordingly being passed on to our F&B customers.
But Government has also realised that restaurants which got Input Tax Credit (ITC) are not passing the benefits forward to their customers. The Government hopes that prices for eating out will get cheaper with an across-the-board cut in the GST rate.
Changes relating to GST rates on certain services
Exemptions / Changes in GST Rates / ITC Eligibility Criteria i. All stand-alone restaurants, irrespective of whether they are air conditioned or otherwise, will attract 5% GST tax without ITC. Food parcels (or takeaways) will also attract 5% GST without ITC.
Restaurants in hotel premises having room tariff of less than Rs 7500 per unit per day will attract GST of 5% without ITC.
Restaurants in hotel premises having room tariff of Rs 7500 and above per unit per day (even for a single room) will attract GST of 18% with full ITC.
Outdoor catering will continue to be at 18% with full ITC.