In the biggest GST rejig yet, tax rates on over 200 items, ranging from chewing gum to chocolates, to beauty products, wigs and wrist watches, were on Friday cut to provide relief to consumers and businesses amid economic slowdown. As many as 178 items of daily use were shifted from the top tax bracket of 28 per cent to 18 per cent, while a uniform 5 per cent tax was prescribed for all restaurants, both air- conditioned and non-AC. Currently, 12 per cent GST is levied in non-AC restaurants and 18 per cent in air-conditioned ones.
Finance Minister Arun Jaitley said the restaurants were not passing on the input tax credit (ITC) to customers and so the ITC facility is being withdrawn and a uniform 5 per cent tax is being levied on all restaurants. However, restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff will be levied 18 per cent GST but ITC is allowed for them. Those restaurants in hotels charging less than Rs 7,500 room tariff will charge 5 per cent GST but will not get ITC.
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