18% GST on food takeaway from non-AC area in eateries

There is more bad news for eateries. The government has said that food lovers have to shell out 18 per cent GST even if they do not dine and take away cooked items from a restaurant, where any part is fitted with an AC.

The new goods and services tax (GST) regime, rolled out from July 1, provides for levy of 12 per cent on food bill in non-AC restaurants and 18 per cent in AC restaurants.  However, for restaurants with a liquor licence, the GST will be 18 per cent, while 5-star hotels need to charge at the rate of 28 per cent.

The Central Board of Excise and Customs (CBEC) has clarified that the same rate will be levied by restaurant-cum-bars, where the first floor area is air-conditioned (AC) and used for serving food and liquor, while the ground floor only serves food and non-AC.

The CBEC said tax would have to be charged at 18 per cent, irrespective of where the supply is made, first floor or second floor or take away counter. “If any part of the establishment has air conditioning facility, the rate will be 18 per cent for all supplies from the restaurant,” it said. The government has also clarified that such restaurants are also not eligible for the composition scheme as they are engaged in supplying liquor.

In July, the Centre had issued a statement saying pre-packed and pre-cooked snacks sold from restaurants will attract 12 per cent GST. It had also said restaurant that have opted for composition scheme with an aggregate turnover of up to Rs 75 lakh, will charge tax at the rate of 5 per cent. The difference in GST rates for the same product prompted customers to have their favourite sweet or snack at the counter or outside the shop. Similarly, many others preferred to take away rather than dining inside. A few coffee shops were seen making sitting arrangements outside their outlets to charge lower GST.