Interest charge

Can a restaurant charge 18% GST on products? | Kerala News

Shimla: No restaurant can charge an 18% tax on produce, a complaint by Chandigarh-based lawyer Ajay Jagga said on Monday. He said some restaurants in Himachal Pradesh charged 18% GST on produce.

Jagga, in a communication to the Central Goods and Services Tax, Shimla Commissionerate, said a restaurant in the town of Parwanoo in Himachal Pradesh charged 18% GST instead of 5% on its premises which was incorrect.

“The rate of GST on restaurant sales is five percent while on a visit to the restaurant at Timber Trail Resorts, Pawanoo on May 27, it was found that this taxable person charges GST at the rate of 18 percent or nine percent under the State GST and equal percent under the Center GST, while the rate of 5%, i.e. 2.5% of the State GST and 2.5% under the Center’s GST,” Jagga said in a complaint.

“Charging GST at the rate of 18% instead of 5% on restaurant premises does not appear to be in accordance with the law and needs to be checked as thousands of tourists pay bills in Himachal Pradesh every days.”

Jagga had previously lodged several complaints with the Department of Consumer Affairs and Department of Excise and Taxation of the Chandigarh Administration.

“This is clearly a case of imposing undue costs on consumers and if anyone does this it amounts to a restrictive and unfair trade practice,” he said.

“A (arbitrarily) higher tax rate from a business perspective should not outweigh the consumer interest,” Jagga added.

Earlier, in a letter to Union Finance Minister Nirmala Sitharaman, he said the Center should issue the necessary notice to all states for restaurants to stop charging unwarranted extra fees, which were imposed to consumers for items such as pastry, cake, etc.