Finance Minister Arun Jaitley today announced the new rates for Goods and Services Tax (GST) after a meeting of the GST Council in Srinagar. Among a host of other services, the biggest tax reform since Independence will also affect your bill when you go out on a holiday, to watch a movie, or eat at a restaurant.
The GST Council has finalised four tax rates of 5, 12, 18 and 28 per cent to apply on services including telecom, insurance, hotels and restaurants.
Non-AC restaurants will charge 12 per cent GST on food bill.
Bigger restaurants will be heavier on the pocket as tax rate for AC restaurants and those with liquor licence will be 18 per cent. 5-star hotels will be even more expensive as the GST rate will be 28 per cent.
Restaurants with Rs 50 lakh or below turnover will go under the 5 per cent composition.
Entertainment tax will be merged with service tax under GST and a composite 28 per cent levy charged on cinema services as well as gambling or betting at race course.
While the rate proposed for cinema halls is lower than 40 to 55 per cent as per current incidence, it may not result ina reduction in tariffs on cinema tickets as states continue to hold right to levy local charges on them.
GST rates for your hotel stay would depend on the tariff rates. Hotels and lodges charging per day tariff of Rs 1,000 will be exempt from GST.
Rate for hotels with tariff of Rs 1,000 to 2,000 per day would be 12 per cent.
Hotels with tariff of Rs 2,500 to Rs 5,000 would be under 18 per cent bracket.
GST for hotels with tariff above Rs 5,000 will be 28 per cent.
The new GST rates will come into effect from July 1.