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“GST one tax, one bill; No need to bifurcate,” says Goyal at HRAWI meet
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Saturday, 15 July, 2017, 08 : 00 AM [IST]
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Prashant Nikale, Mumbai
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Goods and Services Tax (GST) is one tax, one bill, and there is no need to bifurcate henceforth. This was stated by Govind Gopaldas Goyal, chartered accountant and proprietor, Govind Goyal and Company, at a seminar on New Tax Regime on GST, organised in Mumbai by the Hotel and Restaurant Association (Western India) (HRAWI) recently. He added, “We should be happy about GST, because from now on, there will neither be double taxation, nor tax cascading, nor different taxes, which are likely to lead to conusmer disputes.”
Besides Goyal, the line-up of speakers at the event included Narendra Kulkarni, GST commissioner, Raigad; Sungita Sharma, principal additional director general, vigilance department, and Kuresh S Kagalwala, chartered accountant and board of directors, Alif Management Services Pvt Ltd. Following the opening address by Aspi Nallaseth, secretary general, HRAWI, Goyal kicked off the proceedings with the first session, on the basics and the overall pattern of GST.
He highlighted a number of key concepts which are relevant to the hotel and restaurant sector, including input tax credit (ITC), published tariff, Central Goods and Gervices Tax (CGST), State Goods and Gervices Tax (SGST), integrated Goods and Services Tax (IGST), registration for GST importation of goods (GSTIM). Kagarwala spoke about the technical things required for GST. He focused on the software that would be required for GST, the tax credits, tax returns and forms required for GST and the calculation of business-to-business (B2B) transactions in GST.
Sharma explained the various GST rates for restaurants. Non-air-conditioned restaurants have placed in the 12 per cent GST slab, while air-conditioned restaurants, air-conditioned restaurants that serve alcohol and those with a liquor license have been placed in the 18 per cent slab. She added, “GST has clearly categorised the restaurants. There is nothing to get confused.” Kulkarni said, “Anything which is served in restaurants or anywhere on the premises of a restaurant, including in hotel rooms will be charged according to the type of restaurant.”
In the event, several point were discussed one of which was regarding alcohol. Alcohol will be not included in GST regime. The previous tax system will be continued for liquor. Restaurants will have to give separate bill for liquor with Value Added Tax (VAT).
Restaurants will benefit as a result of imposition of GST, as most of the items served will fall in the zero per cent GST slab. They will also get the benefits of ITC, but only on the purchase of goods. Customers will not benefit from ITC on consumption of food and beverages. Restaurants with a turnover below Rs 75 lakh would be eligible for the five per cent composition scheme. “It will allow these restaurants to pay taxes at a flat rate of five per cent. It is going to benefit the small restaurant sector,” concurred the speakers.
During the question and answer session, most of the participants present were concerned about the published tariff and GST rates. Sharma and Kulkarni noted the queries and assured the attendees that they would be presented to the law committee. Goyal said, “The government should have waited for at least six months, so that we could have understood GST properly. There is still a lot of confusion regarding the rate of tax.” Dilip Kothary, honorary treasurer, HRAWI, proposed the vote of thanks.
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