Lack of clarity still prevails over GST

Lack of clarity still prevails over GST



Although the State Government has warned that it would act tough against business persons not passing on the recently announced concessions in goods and services tax (GST) rates to the people, lack of clarity is still prevailing in billing in hotels and restaurants. Although the hotel and restaurant owners welcomed the slashing of the rate to 5 per cent effective from Wednesday, many customers said they were yet to see the full benefit in the billing even after a day.


Minister for Food and Civil Supplies P. Thilothaman told a meeting in Kozhikode on Thursday that the Consumer Affairs and Legal metrology departments would act tough on those people cheating consumers in the name of GST. “Our restaurant suffered a loss of nearly 50 per cent with the introduction of the GST. We expect to see a visible reduction in the prices of food items following the cut in the rates. We may not be getting the input tax credit, but from the customer side, once the sales go up, that will rev up the industry and it is good news for the sector,” said Kushal Agarwal, owner of Punjab Di Rasoi, in Kozhikode.

Suma Ramakrishnan, a teacher from Kozhikode, who prefers eating out with family on holidays, feels that though the GST rates have come down, it might not get reflected in the food bills. “It is highly unlikely that the restaurant owners would revert to the prices, they once increased, under any circumstances. They would increase the price of the product and balance the prices”, he said. The GST rate at hotels in Thrissur has shown a downward trend since Wednesday. Officials of the Indian Coffee House said they had reduced the rate to 5 per cent in the 55 outlets.

The price of masala dosa is now Rs 46 compared with Rs 49, said a Coffee House official. In Bharat Hotel, the rate of masala dosa is now Rs 58 compared with Rs 65 earlier as the GST came down to 5 percent from 18. State working president of Kerala Hotel and Restaurant Owners’ Association G K Prakesh said the cut in GST rates came as a big relief as hotels with an annual turnover of Rs 20 lakhs and above had to pay only 5 per cent and those below it did not need registration. Most restaurants owners in Thiruvananthapuram and Kochi including Indian Coffee said that they had started complying with the new reduced tax rates from Wednesday.

A prominent outlet at Palayam said that their daily sales touched a healthy high on Wednesday after many months. But there are many complaints of restaurants raising their base price after GST was introduced and the cut in GST rates not bringing any effective fall in rates. Some of the air-conditioned restaurants were offering discounts to stem the fall in customers but are thinking of stopping the practice following the cut in GST rates.

Source- Deccan Chronicle.

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