CHENNAI: Customers who like to dine out are in for a double whammy after the advent of GST, some say. In the name of the new tax, restaurants in the city have hiked the prices of food items, apart from levying a 12% or 18% GST, claim customers.
Earlier this week, revenue secretary Hasmukh Adhia had asked restaurants to slash their prices because of the Input Tax Credit (ITC) under which the tax the restaurant pays for inputs could be set off against the final bill. However, in the city, the scenario was the opposite. “For the same food items that I eat usually, at the Parrys Corner branch of a popular food chain, I now pay an additional `25,” said G Aby Varghese, a resident of Kolathur.
After the service tax and the Value Added Tax was subsumed by the GST after it was rolled out earlier this month, a customer would have to pay 12% as tax in a non-AC restaurant and 18% in an AC restaurant. The rate of tax on a parcel of pre-packed and pre-cooked food items available at restaurants would be subject to a 12% tax. Minor disputes at restaurants aside, customers also said that restaurants charged unsuspecting customers varying rates under the guise of GST.
“Although a non-AC restaurant can only levy 12% tax, they sometimes charge customers 18% with no specific mention in the bill,” said Aby.
Confirming the increase in the prices, a staff in a popular food chain in NSC Bose road said: “We have increased the rates after almost all items after GST except for items like coffee. The prices have now gone up by `5 on each dish, on average.”
However, M Venkada Subbu, president of Tamil Nadu Hotels Association (TNHA) said that the restaurant owners were only rounding-off the rates after GST. “Some restaurants round off the prices after GST but the prices by themselves could not have gone up. At least 20% of our sales have gone down after GST,” he said.
On the difference in the tax rates slapped by restaurants, M Ravi of TNHA said that it was permitted as per the rules of GST. “If a restaurant has both AC and non-AC dining, it is permitted according to the rules of GST for them to charge 18%,” he said. Although he added that it was unfair for a customer to be charged 18% if he/she dined at the non-AC hall.
“We have to question the government as to how the rules allow this. Although some restaurants like ours don’t do it, there are provisions in the rule for those who want to.”