Representational image | Photo: iStockPerhaps no other establishments have been as affected by the Goods and Services Tax as restaurants. Tax on your food bill has gone up 18 percent in one stroke.
The people still can’t digest the unpalatable truth: food is taxed 18 percent while gold gets away with mere 3 percent. Eateries with less than Rs 20 lakh in annual turnover have been exempted from the GST but establishments with revenue between Rs 20 lakh and Rs 75 lakh are taxed 5 percent.
In other words, restaurants with daily turnover of Rs 20,000 have to pay tax. Majority of the establishments in Kerala fall in this category. The 5 percent tax cannot be extracted from the customers though.
A restaurant owner has to pay Rs 1,000 as tax everyday if he gets Rs 20,000 as revenue. This translates to around Rs 30,000 per month. No one has started paying at this rate, warning that they will be forced out of the business with the tax.
Non-air-conditioned restaurants with annual turnover of Rs 75 lakh can collect 12 percent GST from customers. However, if the establishment has fitted an air-conditioner anywhere on the premises, then the tax rate goes up to 18 percent.
This has led to constant complaints from consumers who protest the higher tax rate even though they had opted for non-air-conditioned space.
If a family eats for Rs 1,000, they have to pay Rs 180 as tax. Many customers have cut down on their eat-outs, leading to a 30 percent to 40 percent slide in the revenue of restaurants since the rollout of the GST in April.
Automobiles
The automotive industry had to face a revamp of the GST in July and of the GST cess in September. Higher cess has made luxury cars and SUVs costlier. SUVs are now pricier by Rs 60,000-70,000, while luxury car bills have gone up by Rs 15,000-20,000.
At the same time, the introduction of the GST has made smaller cars cheaper by around Rs 25,000.
Home appliances
The GST has only increased tax by 1 percentage point. The excise duty and value-added tax of 27 percent has gone up to 28 percent. Prices are more or less at the same rate.
Of course, some products are selling at Rs 100 or Rs 200 more but the reason is the hike in fuel prices and resulting rise in transportation costs. Many of these products are brought from north India.
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