Are hotels, eateries overcharging you? How to get the math right

Food served at restaurants attract tax at two rates under GST - 12 per cent and 18 per cent

 

 

As consumers, we are hardly aware of the components included in the restaurant bills. Next time do check your bill to see if the proper GST or goods or services tax rate has been levied. The Central Board of Direct Taxes (CBDT) on Tuesday clarified on rates of GST for restaurants.

Food served at restaurants attract tax at two rates under GST - 12 per cent and 18 per cent (including both CGST (Central GST) and SGST (State GST)) - depending on whether it is an AC restaurant or whether the restaurant has the licence to serve alcohol.
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Understanding your restaurant bill - 

If you revisit your food bill from the pre-GST fine-dine experience, you’ll find Service Tax, Service Charge, VAT being added over and above the food value.

 

VAT: This was the tax charged on the food portion of your bill.

Service tax: This was the tax charged on the services provided by the restaurant.

 

Service Charge: This is a charge applied by the restaurants and not by the government. It is not mandatory to pay the service charge, as per government rules.

 

 

However, the rates under GST are vastly different than what you would find before the tax policy change. Let us look at these changed rates below...... Full Article Source