The Tamil Nadu Chamber of Commerce and Industry has appealed to the GST Council to accept the recommendation of the Group of State Finance Ministers (GOM) to levy a uniform tax of 12% on food served in all restaurants, irrespective of air-conditioning.
In a statement issued here on Friday, senior president S. Rethinavelu and president N. Jegatheesan said that because of the levy of 12%, 18% and 28% GST for food items, the most progressive taxation system generated discontent among the public. There was concerted demand to reduce the tax rates, as taking food in a restaurant was a necessity and not a luxury. At present, the chamber said, food served in restaurants under composition levy was taxable at 5%. Non-AC restaurants had to pay 12% and restaurants with even partial air-conditioning paid 18% GST. As a result, eating out had now become more expensive. With prolonged summer season in India, AC had become an essential requisite and hence the distinction between AC and non-AC restaurants was irrelevant. A higher tax rate of 18% and not 28% should be made applicable only to five star hotels, it said.
While welcoming the GOM’s recommendation to increase the turnover limit to ₹1.5 crore from ₹ one crore and offer a lower tax of 1% for manufacturers also at par with traders, the chamber said that the proposal, if implemented, would extricate several lakhs of traders from the cumbersome obligation of filing monthly returns. Consumers would also benefit from the lower tax rate. The chamber appealed to the GST Council to accept the two recommendations and implement them immediately.
