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Small restaurants get reprieve under GST, govt assures no harassment

LiveMint logoLiveMint 04-03-2017 Remya Nair

New Delhi: Restaurants with an annual turnover of less than Rs50 lakh will be able to avail the so-called composition scheme under the goods and services tax (GST) regime and pay a flat tax of 5% after the GST council decided to widen the ambit of this scheme to include services.

The composition scheme enables taxpayers with a revenue threshold of up to Rs50 lakh to pay a fixed tax rate and reduce the procedural requirements that have to be followed by businesses in GST.

It has been decided that restaurants with an annual turnover of less than Rs50 lakh can pay a tax at the rate of 5% (2.5% central GST and 2.5% state GST), said revenue secretary Hasmukh Adhia at a press conference after the GST council meeting in New Delhi.

The scheme already covers traders and manufactures who will be taxed at 1% and 2%, respectively.

Also read: GST council clears CGST and IGST laws

Adhia also sought to allay concerns over misuse of the anti-profiteering clause that seeks to ensure that businesses pass on benefits of reduction in costs from GST to the consumers. “We will not be sending inspectors to businesses. It has been put as an enabling provision in the law. If profiteering becomes rampant after GST is implemented, then the council may take a call on how to implement this provision,” he said.

The draft GST law has included an anti-profiteering clause and has provisions for the council to appoint an existing body or create a new body to implement this provision.

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