After a two-day meeting of the GST Council in Srinagar, on Friday, Finance Minister Arun Jaitley made announcements related to new tax rates on services. The GST council has agreed on different tax slabs for restaurants depending on their turnover and whether they are AC or non-AC.
This means consumers would have to shell out more or less depending on whether they are visiting a restaurant with air conditioner or just a regular non-ac food joint. The service tax rates at restaurants in 5-star, 7-star hotels will be much higher at 28 per cent.
Similarly, the GST Council decided on different tax rates depending on the type of hotels. The GST on hotels and lodges which charge between Rs 1,000 and Rs 2,500 will be 12 per cent. While, the GST on hotel rooms in the price range of Rs 2,500-Rs 5,000 will be 18 %. For lodges and hotels cheaper than Rs 1,000, the GST is set at 5 %.
Here is a lowdown on the new rates:
- Restaurants with a turnover of less than Rs 50 lakh will be levied a tax rate of 5 per cent.
- Non-ac restaurants will have a 12% tax rate.
- AC restaurants will have to shell out 18% tax.
- Also five-star restaurants will have to submit a luxury tax of 28 percent.
- Hotels, lodges with tariffs less than Rs 1,000 will be taxed at 5%.
- Hotel lodges with tariffs between Rs 1,000- Rs 2,500 will be charged 12% tax
- Hotel lodges with tariffs between Rs 2,500- Rs 5,000 will be charged 18% tax.