Under the Goods and Services Tax regime, while non-airconditioned restaurants attract 12 per cent tax, AC restaurants and those serving liquor attract a tax rate of 18 per cent. In the previous indirect tax regime, service tax was levied on the restaurant bill, but the restaurant operators could not avail input tax credit for taxes paid on inputs.

Adhia further said that anything that is served as part of restaurant bill will be subject to Goods and Services Tax, barring alcohol on which value-added tax will be levied. “On the entire value of food bill, including service charge, on that portion also Goods and Services Tax will apply,” he said. Regarding representations made for a concession for car leases prior to Goods and Services Tax rollout from July 1, Adhia said that the tax department has received representation for transition provision of lease service industry. As per the Goods and Services Tax provisions, input tax credit (ITC) will not be available for central excise already paid on cars which are on lease.

“There are a lot of representations on this about transition for lease service industry. We are looking at the representation but we are not sure how to handle this,” Adhia said.

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Source:::  The Indian Express, dated 12/07/2017.