THIRUVANANTHAPURAM: Finance Minister Thomas Isaac has said the unscientific overcharging by restaurants is burdening common man. The minister said restaurants were imposing GST upon existing prices without subtracting earlier impositions. Take for example a vegetarian meal in an AC restaurant with an annual turnover above `75 lakh. The meal is priced at `75. This include the tax paid on the `35 he had incurred on raw materials he used for the meal (`2.45), the tax on consumables like cooking gas (50 paise), service tax of 5.8 percent (`4.50), and the compounding VAT tax (50 paise).
“Together the tax on the `75 meal is 7.95. Now that all these taxes have gone, and the actual price becomes `67.05 (`75-`7.95). GST of 18 percent should be applied on the actual cost of `67.05 and not on `75. But this is not happening,” Isaac said.
The minister said he would hold discussions with hotel and restaurant associations for their cooperation.
In restaurants with an annual turnover of less than `75 lakh, prices of meals and chicken items should go down. A chicken item costing `350 in an AC restaurant should cost only `308.70. But they charge `397.50 now.