GST AND ITS IMPACT ON RESTAURANT CAFÉ

AND FAST FOOD OUTLETS, E-COMMERCE

MARKETPLACE IN INDIA

Presented By,
Ms. Moumita Mishra
Asst. Professor
ISBR College
Objective and Methodology:

 This paper is basically based on concepts and the secondary data

available from various resources.
 Draft GST bill is also used for different information.
 The main objective of this study is to understand the relevance GST
in Restaurant Café and Fast Food Outlets and in E- Commerce. This
paper throws light on certain fundamental and theoretical aspects.
More emphasis is given on environmental cost and accounting and
awareness.
GST and Restaurant, Café and Fast Food Outlets:

Before GST: before GST the scenario in this market was different and
complicated. Before, the taxation system was so different and difficult
to understand by the people while they had to pay number of taxes.
VAT at (12.5 per cent) + Service Tax (6 per cent), Krishi Kalyan
Cess and Swachh Bharat Cess were levied. All together customer has
to pay around 20.5% on restaurant bill. Upon that Restaurants used to
levy 10% service charge.
GST and Restaurant, Café and Fast Food Outlets:

After GST: The date 1st July 2017 will be written in Indian history in
golden words when Indian Government introduced GST in Indian
Taxation system. . Under the new system, the restaurants are broadly
divided into two areas: non-AC and AC restaurants. Air conditioned
restaurants will attract tax of 18 per cent and for low-cost restaurants,
the tax rate would be 12 per cent. Non-AC restaurants will charge 12
per cent GST on food bill. 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.
 GST and Restaurant, Café and Fast Food Outlets:

Further Amendment: The GST Council farther amended rates on Nov

11, 2017 for restaurants which is quite cheaper than the earlier rates.

Types of Restaurants GST Rates

All restaurants 5% no ITC (Input Tax Credit)

Restaurants within hotels
5% no ITC (Input Tax Credit)
(room tariff <7,500- 5% without ITC)

Restaurants within hotels

18% with ITC (Input Tax Credit)
(room tariff >7,500 ) still 18% with ITC
Outdoor catering 18% with ITC (Input Tax Credit)
Findings:

 When GST has been implemented in restaurant sector it was quite

disappointing for both the customers and owners. That is why it has
given a second thought to government to think over it again.
 The revised rate of GST broadly welcomed by both the owners and
the customers. This is a very progressive step which will make the
eating out and ordering food at home much more affordable.
 This has given more importance to the middle class customers rather
than high class customers.
E- Commerce Marketplace Sellers

 Government has decided to keep the GST rates according to the

goods purchased or service provided to the customers by marketplace
sellers.
 Marketplace operators are mandatorily deduct a percentage amount
as GST liability of the sellers and deposit the same to government
which Mechanism is called as Tax Collection at Source (TCS).
 GST is a destination based tax i.e. the goods and service will be taxed
at the place where they are consumed or used not at the origin.
 There will not be any threshold for GST registration for e-commerce
sellers.
Findings:
 Impact of GST in E commerce sector has a great value. For the
purchaser GST is completely based on the type goods purchased by
him from any marketplace.
 Here from where the goods has been purchased and where the goods
has been sold makes a huge difference. In case of SGST will not be
applicable from which state the goods has been sold, SGST will be
applicable in which state it is actually going or consumed.
 The treatment of stock transfer from seller to the warehouse under
GST would be different as any ‘supply’ is taxable. This might lead to
cascading of taxes as typically sellers do not ‘sell’ stock to e-
commerce companies.