Proposed GST rates on Sugar, tea, coffee, milk powder lower than present levies

Tax officials have given Zomato ease after removing a demand for Rs 5.9 crore in overdue Goods and Services Tax (GST). An earlier demand decision issued by the Additional Commissioner, Central Goods and Services Tax, Gurugram, was overturned by a favorable order from the Commissioner (Appeals) in Gurugram, Zomato said in a regulatory filing. The first increase in the tax demand was made for the July 2017–March 2021 timeframe.

Zomato has encountered additional tax-related difficulties. Numerous GST notices have been sent to the corporation by different national authorities. A GST demand of Rs 803 crore, pertaining to alleged unpaid taxes for the period from October 29, 2019, to March 31, 2022, is the highest of these. Zomato is contesting this allegation at the moment.

Since April of last year, the business has disputed the demand, arguing that it has any validity. The total demand, including fines, was Rs 11.82 crore. Zomato's export services to its overseas companies served as the basis for the tax assessment.

Zomato is still growing its business in the grocery and meal delivery industry in spite of these tax conflicts. Investors have received assurances from the corporation that it is handling all compliance issues in line with the law.

Zomato, the online food delivery aggregator, has received a Goods and Services Tax (GST) demand order of Rs 17.7 crore from the Assistant Commissioner of Revenue, West Bengal. The demand includes GST on delivery charges, along with interest and penalties. This order pertains to the period between April 2021 and March 2022.

In a regulatory filing, Zomato stated, "We believe that we have a strong case on merits and the Company will be filing an appeal against the order before the appropriate authority." The demand consists of Rs 11.12 crore in GST, Rs 5.46 crore in interest, and a penalty of Rs 1.11 crore.

Zomato further clarified that it had provided relevant documents and judicial precedents in response to the show cause notice, but these appear to have been disregarded by the authorities in their decision. The company emphasized its confidence in the strength of its case and does not foresee any significant financial impact as a result of the order.

This is not the first instance of Zomato receiving tax demand notices, as it has faced similar issues with various authorities in the past. However, the company is committed to addressing the current matter through the proper legal channels.

Online food delivery platform Zomato has been issued GST tax demand orders totaling over Rs 4.59 crore by authorities in Tamil Nadu and West Bengal, including applicable interest and penalties.

Zomato has announced its intention to appeal against these orders, which were passed by the Assistant Commissioner of GST and Central Excise, Nungambakkam Division, Tamil Nadu, and the Assistant Commissioner of Revenue, Government of West Bengal.

The Tamil Nadu tax authority issued an Adjudication Order under Section 73 of the Central Goods and Services Tax Act, 2017, and the Tamil Nadu Goods and Services Tax Act, 2017. The order demands GST of Rs 81,16,518, along with an unspecified amount of interest and a penalty of Rs 8,21,290.

Similarly, the West Bengal authority passed an adjudication order under Section 73 of the Central Goods and Services Tax Act, 2017, and the West Bengal Goods and Services Tax Act, 2017. This order demands GST of Rs 1,92,43,792, interest of Rs 1,58,12,070, and a penalty of Rs 19,24,379.

In a regulatory filing, Zomato stated that it had provided a response supported by relevant documents and judicial precedents, which it believes were not fully considered by the authorities in their decision. 

Hardcastle Restaurants Pvt Ltd, McDonald's India franchisee, has pulled the government to court over no input tax credit in the Goods and Services Tax (GST) framework for restaurants.

Presently, restaurants are levied a 5% GST, however, they can’t claim the input tax credit against the tax they paid on raw materials and other expenses such as rent.

In November 2017, the GST rate on restaurants was cut to 5% from 18%. The 18% GST allowed these restaurants to claim the input tax credit, under the 5% rate, they can’t do that.

Last week, a Council appearing for Hardcastle, Rohan Shah, filed a writ petition in the Gujarat High Court and notices were issued to the government to file a reply in this regard.

Abhishek Jain, Tax Partner, EY India, said, “A lower rate while optically has fared well with customers, a denial of input tax credit to restaurant businesses has increased their tax costs. These businesses have for long been discussing with the government on an optional higher rate with input tax credit and would now also look forward to the final High Court Ruling on this.”

गुड्स एवं सर्विसेज (जीएसटी) के तहत् नेशनल एंटी प्रोफिटरिंग अथॉरिटी ने उत्तरप्रदेश स्थित मैगी नूडल्स के एक वितरक को मुनाफाखोरी में शामिल होने के आरोप में पकड़ा है। 

एंटी प्रोफिटरिंग के सतर्कता अधिकारी ने डीलर को 18% की उपभोक्ता कल्याण निधि में 90,778 रूपये जमा करने के साथ 2253 रूपये शिकायतकर्ता को लौटाने के भी निर्देश दिए हैं।

मैगी के ही खुदरा व्यापारी शिकायतकर्ता ने बताया कि नवंबर 2017 में जीएसटी की दर 18% से घटकर 12% हो जाने के बाद भी  35 ग्राम के मैगी के पैकेट पर मूल कीमत को बढ़ाकर इतना कर दिया गया कि उसका दाम पहले जैसा ही बना रहे। हालांकि उसने यह भी बताया कि 5 रूपये एमआरपी वाले मैगी के पैकेट पर होने वाले नुकसान की भरपाई करने के लिए 12 रूपये एमआरपी वाले (70 ग्राम) के पैकेट के दाम घटाने की बात की गई। 

एनएए ने अपने आदेश में यह स्पष्ट किया है कि करों में आई कमी का लाभ उत्पाद की हर इकाई पर दिया जाना चाहिए। वितरक इस बात का निर्णय नहीं ले सकता कि वह एक साइज़ के पैकेट को कम और दूसरे साइज़ के पैकेट को अधिक कीमत पर बेचेगा। यह भी स्पष्ट किया गया कि 35 ग्राम का पैकेट 70 ग्राम के पैकेट से अलग है और इसे खरीदना वाले लोग भी अलग-अलग हो सकते हैं और इस तरह एक उत्पाद पर उपभोक्ता को दिए जाने वाले लाभ में भेद नहीं किया जा सकता। 

पीडब्ल्यूसी इंडिया के प्रत्यक्ष कर के पार्टनर और लीडर प्रतीक जैन ने बताया, ‘’एक अन्य निर्देश द्वारा यह स्पष्ट है कि जीएसटी की दर में होने वाली कटौती की वजह से होने वाले लाभ को इकाई स्तर तक वितरित करना होगा। इसे उत्पाद स्तर या समग्र स्तर पर नहीं किया जा सकता।‘’

The National Anti-profiteering Authority (NAA) under the Goods and Services Tax (GST) has held an Uttar Pradesh-based dealer of Maggi noodles guilty of indulging in profiteering.

The anti-profiteering watchdog has directed the dealer to deposit Rs 90,778 along with an interest of 18% per annum in the Consumer Welfare Fund and refund Rs 2,253 to the complainant.

The complainant, a Maggi retailer, had alleged that despite a reduction in the GST rate from 18% to 12% in November 2017, the base price of a 35gm pack was increased to bring it at par with the price before the change. He, however, said that the benefit which accrued in respect of Rs 5 MRP pack had been passed on by reducing the price of Rs 12 MRP (70gm) pack of Maggi. 

NAA, in its order, said that the benefit of tax reduction had to be passed on for every unit, the dealer could not selectively lower price of one pack size to cover other pack sizes. It further stated that a 35gm pack of Maggi Noodles is distinct from a 70gm pack and both the packs may be bought by the different customers and hence, the benefit accruing to one customer cannot be given or denied to another.

Pratik Jain, partner and leader, indirect tax, PwC India, said, "This is another ruling which mandates that any benefit arising as a result of reduction in GST rate has to be passed on at each stock keeping unit level and the same cannot be passed on at a product or entity level."

National Anti-Profiteering Authority (NAA) has rejected a complaint against a Subway franchisee, saying that the increase in the base price of its products was commensurate with removal of input tax credit (ITC) benefits.

The GST Council had lowered the tax rates on restaurants to 5% from 18%, except those located within hotels with room tariffs of Rs 7,500 and more, effective November 15. In February 2018, the government also withdrew input tax credit where 5% GST was applicable. 

NAA, in its order, stated that a franchisee of Subway India, NP Foods, had raised the base price of products to make good the loss which had occurred due to denial of ITC post GST rate reduction.

A consumer had filed a complaint against the franchisee alleging that the restaurant had raised the base price of one of its offerings to Rs 145 from Rs 130 after the reduction of the tax rate by the GST Council.

Abhishek Jain, Partner at EY, said, "This ruling comes as quite a welcome measure for the restaurant industry in specific, which had offset the increased costs on account of disallowance of input tax credit with the reduced tax rate."

Abhishek A Rastogi, Partner at Khaitan & Co, said, "The whole dispute in the days ahead would circumvent the phrase ‘commensurate reduction of prices’ and, hence, it is imperative that the procedural mechanism to arithmetically calculate the price reduction is provided."

Driven by the double-digit volume growth, FMCG major Britannia Industries has posted 19.41 per cent growth in consolidated net profit at Rs 258.08 crore for the quarter ended June 30, 2018. The company had posted a net profit of Rs 216.12 crore in the April-June period a year ago.

 For the quarter under review, the total revenue stood at Rs 2,585.84. It was Rs 2,375.01 crore in the corresponding period of the previous fiscal, Britannia Industries said in a BSE filing.

The company said reported revenue, part of total income, for the quarter ended June 30, 2018, is not comparable to the revenue reported in the previous period due to implementation of GST with effect from July 1, 2017.

"Excise duty has subsumed into GST, and hence revenue from sale of goods for the period commencing July 1, 2017 does not include excise duty," it added.

"We have witnessed positive momentum in the market over the last few quarters. Our double-digit growth for the quarter is backed by a double-digit volume growth primarily due to our investment in brands and widening our distribution network through focus on direct reach, rural market and weak states," Britannia Industries MD Varun Berry said.

The international businesses remained flat due to slow-down in geographies like Middle East and Africa, Britannia said.

"The growth in dairy business has been subdued due to our focus on driving value added products and reducing our play in the less profitable commoditised products, which has helped us improve our profitability," Britannia said.

The company said in its 100th year it will enter into “many unchartered territories" to secure disruptive growth.

The company in a separate filing said its board of directors has recommended and approved issuance of secured redeemable non-convertible debentures as bonus debentures of Rs 50 in the ratio of 1 bonus debenture for every 1 equity shares held by the shareholders of the company.

Shares of Britannia Industries were trading at Rs 6,318.95 apiece, down 1.19 per cent, on BSE.

Pizza chain Domino’s has got caught in the crosshairs of anti-profiteering authorities for not passing on a cut in goods and services tax to consumers. Anti-profiteering provisions make it compulsory for companies to pass on any benefits from a lower GST rate to consumers.

The Directorate General of Anti-Profiteering found that Domino’s had not reduced the prices of all its food products after the GST Council cut the tax rate on restaurants last November, and instead passed on the benefit selectively.

“An investigation report has been issued,” said a government official privy to the development. In India, Jubilant FoodWorks operates Domino’s restaurants under a franchise deal with American chain Domino's Pizza Inc.

AJubilant spokesperson said the company believes it passed on the benefits. “The company has received a copy of the investigation report submitted by the Director General Anti-Profiteering (DG) to the National Anti-Profiteering Authority (NAA). However, JFL believes it has passed on the benefit on account of reduction of GST rates to the customers and accordingly will represent its case before NAA,” the spokesperson said in an email response to ET’s questions.

The GST Council in its November 15, 2017 meeting slashed tax rate for restaurants to 5% from 18%. An investigation by the Directorate General of Anti-profiteering, previously called the Directorate General of Safeguards, found that the chain did not pass tax benefits to all consumers.

The government had created the anti-profiteering framework to shield consumers from any runaway price rise post rollout of GST from July 1 last year. Under the provisions, all complaints at the national level are examined by a standing committee and at the state level by state screening committees consisting of officials.

If a complaint is found to have merit, it is sent to the DG anti-profiteering for an investigation to be completed in three months. The DG then sends the report to National Anti-Profiteering Authority, which issues the order. The DG's investigation report is key to the decision by the authority and an adverse report would impact a company. However, there are no guidelines for businesses on anti-profiteering and it has been left to their wisdom to pass on tax benefit in the manner they deem right.

From Swiggy to Foodpanda, online food delivery service firms face GST heat. Online food delivery service companies like Swiggy are facing the heat from restaurants after the goods and services tax (GST) on eating outlets was cut to five per cent, from 18 per cent in November, and input tax credit provision was withdrawn.

A few eateries have begun charging higher costs on online delivery platforms. Others are arranging a commission cut with online sustenance conveyance accomplices to compensate for the 3.5 for every penny extra cost because of inaccessibility of the information assess credit (ITC) office.

Swiggy, Zomato and Foodpanda provide online delivery services to restaurants at acommission of around 20 per cent, which is levied an 18 per cent GST. Unlike earlier, restaurants can no longer claim ITC on the 18 per cent GST for the input services from these delivery platforms. “These online food delivery companies have represented for a rate reduction or to allow ITC to restaurants. The matter is being discussed," said a government official.

French liquor company Pernod Ricard has claimed to have recorded a sales hike of 14% for the first nine months (July 2017-March 2018) of its fiscal compared with just 1% in the year-earlier period, which suffered from dwindling sales due to the impact of demonetisation.

The world’s second-biggest spirits maker behind Britain’s Diageo said global sales rose 6.3% organically to about 7 billion euros, helped by higher revenue from Asia that rose 10%. The company attributed the Asia growth to the early onset of the Chinese new year and “strong growth” in India. Asia contributes 42% to the top line.

With the “highway ban now fully implemented, no further disruption (is) expected. We are awaiting clarification from the GST council as to the scope of tax application,” the company said in an investor presentation on Thursday. This statement is in reference to the Supreme Court’s move to ban liquor outlets within a distance of 500 meters from highways.

GST doesn’t include the alcoholic beverage industry. But raw materials used to fall under its ambit thereby pushing up input costs for the industry. Pernod, the maker of Imperial Blue and Royal Stag whiskey, has strategic international brands which include Absolut Vodka and Chivas Regal Scotch. It sells wines under labels such as Jacob’s Creek, and Brancott Estate in the country.

The central ministry has been looking into the subjection of Food and beverages distributed at educational institutions to Goods and Services Tax (GST) of five percent.

The Ministry of Finance in a public notice stated that the GST on the supply of food and drinks in a mess or canteen in an educational institution would attract five percent tax sans Input Tax Credit (ITC).

The Ministry also noted that if schools up to higher secondary level supply food directly to students, the same would be exempt from the GST.

Earlier this month, the Centre notified that a uniform rate of five percent will be charged towards GST in all railway catering services I n trains or stations.

As per the Central Board of Excise and Customs (CBEC), the decision was taken with a view to remove any doubt or uncertainty in the matter and bring uniformity in the rate of GST applicable to supply of food and drinks made available in trains, platforms or stations.

Online food and grocery retailer Grofers claims it has tripled sales between February 2017 through November, 2017 and it is exiting this year at a revenue annual run rate of Rs.1000 crore.

Albinder Dhindsa, co-founder & CEO, Grofers said “At Grofers, sales tripled between February and November, 2017 and we are exiting this year at a revenue annual run rate of Rs.1000 crore. Our average daily order volumes are now at 25,000 - a near 200% jump from the start of the year. Our core category for the year remained staples. We successfully positioned ourselves as a monthly grocery stock-up destination with staples growing 5 times for us in 2017. Also, starting June this year, we maximized our investment in building the General Merchandise category, including a range of kitchen & bathroom utility essentials, plastic ware, cookware, apparels and more. We want to be a one-stop solution for everything our consumers need for their homes, from food FMCG, non-food FMCG to durables. Post GST, we grew our GMV by 60% over the previous quarter. Our new user acquisition rates also increased by near 50% in the month after GST implementation.

Also during the GST transition, Grofers partnered with major brands and suppliers to stock up extra in order to resolve any availability concerns for the customers. Further, during that period, a low supply in offline channels, proved to be a period of online grocery adoption, which in a way has helped the company to gain consumers.

Lately online food and grocery retail has been attracting a lot of interest from e-commerce giants including Amazon, who has received FDI approval to open its food only retail venture in India.

Dhindsa also said “The $500m online grocery industry (GMV) has been witnessing steady growth in 2017 and we have been the biggest driver of that growth. The Industry has since been growing at 30% q-o-q with Grofers projected to grow at 50% q-o-q, till the end of Q4 2017. We expect the market to grow to a consolidated GMV of $2 bn by 2019. We have grown 4x over the last year and continue to provide a unique value proposition that is built for Indian customers”.

Hotel and Restaurant Association Western India (HRAWI) claims that the reduction in GST on restaurant services without input credit will impact the industry in a negative way. To this effect, HRAWI recently submitted a representation to state finance minister Sudhir Mugantiwar.

HRAWI president Dilip Datwani said “expenditure like capital expenses, franchising, outsourcing and select food items among others will take a beating as the GST paid on such services or expenditures will not be available for input credit. This not only discourages expansion or development, but also makes it difficult for establishments to pass on any reductions to the customers. We have therefore requested the government to retain Input Tax Credit (ITC) for effective reduction in burden on consumers at large. One reason our tourism industry fails to attract as many foreign tourists as it should is the heavy tax on tourism (23%). We feel that tourism exports should be treated at par with other exports, and such transactions be zero-rated under GST, without the flow of input credits. This could easily increase earnings by at least another 10-20%”.

Other key reconsiderations suggested by HRAWI included making the Integrated Goods and Service Tax (IGST) available for tourism accommodation services basing the rate categorization for hotels on transaction value rather than on declared tariff reducing GST on room tariffs of Rs7500 and higher to 12% and accordingly, bring the GST for restaurants at such hotels at par with all others, to 5%. The recommendations also included allowing hotels and resorts to unbundle package rates and not levying GST on complimentary meals, among other things.

The association has requested for the foreign exchange earned by tourism services to be treated as export or deemed export. HRAWI sources said that since GST on goods and services exported from India are exempted, the tourism industry should be treated no differently, if tourism exports meet all the criteria such as other exported goods and services, where the service provider is in India, earnings are in foreign exchange and buyers are foreign in origin.

Restaurants across the country complied with the lower goods and services tax (GST) rate of 5% after initial reluctance to do so, at least from some quarters. The new GST rates for a host of items from washing powders and razors to shampoo and watches.

Adarsh Shetty, president, Indian Hotel and Restaurant Association (AHAR) said “Almost all other associations have welcomed the move, arguing that it will not just benefit consumers but also make life simpler for restaurant owners, who do not have to comply with complicated filing requirements. It is very positive for everyone and there is no increase in prices.

Some members of the National Restaurants Association of India (NRAI), which largely represents upmarket chains, have been complaining about the government’s decision to withdraw input tax credit (ITC) and have argued that menu prices may rise by around 6% due to withdrawal of the benefit, which the trade body has said is a key characteristic of GST.

NRAI president Riyaaz Amlani said “Government’s decision was a step in the right direction although a source present in a closed-door meeting of some of the restaurant associations said some of the eateries were suggesting that prices on the ground will not change due to withdrawal of ITC. We are all on the same page and we welcome the decision,” told TOI, adding that the trade body will make a “logical case” for reintroduction of tax credits.”

For organised chains, the major concern is the tax that they pay on rent, which can add up to 20-25% of the annual expenditure. With a credit on 18% tax paid on rent, a part of the gains were available to restaurants by way of lower costs. It’s a different matter that they argued before the government that the overall benefit from ITC was only 1%, which the government believed added up to 6% a figure that now tallies with the calculation being dished out by some of the chains.

Rating agency ICRA welcomed the decision to levy 5 per cent GST on all restaurants, both air-conditioned and non-AC, saying the revision in rates is positive and will bring down the dining-out cost. Last week, the GST council lowered the tax rate of restaurants to a uniform 5 per cent from 12 per cent on non-AC restaurants and 18 per cent on air-conditioned ones.

ICRA Vice President and Sector Head Pavethra Ponniah said “This revision in GST rate for restaurants is positive, as it would bring down the dining-out cost, supporting footfalls and revenues at a time when most organized restaurants are struggling to grow demand. As most major inputs for restaurants like grains (not packaged), vegetables, poultry and seafood are exempt from GST, the input credit advantage available for restaurants was negligible. Restaurants were also not passing on any benefit of input tax credit to the consumers under GST.”

Currently, 12 per cent GST on food bill is levied in non-AC restaurants and 18 per cent in air-conditioned ones. All these got input tax credit, a facility to set off tax paid on inputs with final tax.

The council said the restaurants, however, did not pass on the input tax credit (ITC) to customers and so the ITC facility is being withdrawn and a uniform 5 per cent tax is levied on all restaurants without the distinction of AC or non-AC.

Restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff will be levied 18 per cent GST but ITC is allowed for them. Those restaurants in hotels charging less than Rs 7,500 room tariff will charge 5 per cent GST but will not get ITC.

The GST Council has decided to cut tax rate for restaurants to 5 percent without Input Tax Credit. The new tax rate would be applicable to both AC and non-AC restaurants, except those in five-star hotels. Outdoor catering rate has been fixed at 18 per cent.

Hotels with Rs 7,500 room rent have been fixed at 18 per cent with input tax credit. Under the previous GST structure, it all boiled down to 12 per cent GST for non-AC restaurants and 18 per cent GST for AC restaurants. In case of five-star hotels, the charge was much more 28 per cent.

Under the previous rates if any part of a restaurant has an air conditioner, 18 per cent is charged as the GST. That also meant that takeaways from AC restaurants were levied with the same 18 per cent.

The GST Council also raised the threshold for the composition scheme. Under the composition scheme, traders are allowed to pay a fixed rate to avoid GST paperwork. Threshold for composition scheme was hiked to 1.5 crore.

West Bengal finance minister, Amit Mitra said “aggregate loss of revenue was around 60,000 crore for Centre and 30,000 crore for states in last 3 months”.

Known for bringing the original bakery flavours of France to India, L’Opera, the French patisserie and boulangerie, has recently opened its outlet at PVR Directors Cut Ambiance Mall in Vasant Kunj. With fittings and furniture brought in from overseas, the outlet recreates the atmosphere of France.

Kazem Samandari, the executive chairman of the L’opera chain said “We have been partners with PVR for a long time. So when PVR approached us to open an outlet for the Director's Cut we immediately agreed. The price has been kept a little high at this particular outlet considering the fact that our target audience here is people from the upper class. The lack of easily accessible French bakery products in India is the reason why we are into this business. We have got Paris to India. When people come here to eat and say 'This reminds me exactly of what I had in Paris' makes us happy and proud. What makes L'Opera stand apart from the rest of the bakery outlets is its taste, which I can assure that you won't get anywhere else. We don't use any artificial or colouring material. The price may seem higher when compared to other bakeries but there is no compromise with taste”.

L’Opera outlet can accommodate around 20 people at a time. Even the menu has been especially curated so that there are not just the pastries but sandwiches, baguettes, croissants and some of others.

L’Opera chef Amit said “French bakery products are vast when it comes to variety. So, it was not easy for me to introduce just five new items for this outlet. We initially had decided 10 items and finally came down to five. And all of these will evoke the authentic taste of bakeries available in France”.

L'Opera makes over 26 types of breads every day, some of which include baguettes, croissants, pain paysan (peasant bread), Swiss tress, macarons, quiches, verrines, teas and jams.

L'Opera has opened five outlets this year, including the one in Ambiance Mall and plans to extend to other cities as well.

Hotel and Restaurant Association of Western India (HRAWI) has welcomed the Government’s proposal to reduce the GST rate from 18 per cent to 12 per cent, making it uniform for both the air-conditioned (AC) and non AC restaurants. The Association has also appealed to the Govt. to continue providing the Input Tax Credit (ITC) to hotels and restaurants which will help them maintain the prices for the food and beverages on the menu. HRAWI has stated that despite the cost of operations having actually gone up, hotels and restaurants are maintaining old prices on the menu in fear of losing customers.

Dilip Datwani, President, HRAWI said “The move to bring down the GST rate for AC restaurants will definitely encourage the customer to eat out again. We welcome the proposal and thank the Government for considering our appeal. Presently all industries, and not just hotels and restaurants are trying to grapple with GST and the transitionary phase has been a very difficult phase for us. Continuing to provide ITC will help businesses to counter the rising prices on raw material and other utility costs. As of now, none of our vendors have reduced prices or passed on benefits of ITC to us. Additionally, post introduction of GST the costs of operations and raw materials have actually gone up. However many hotels and restaurants have continued offering F&B at the old prices but with the reduction in the GST rate, we will now be able to remain competitive”.

Dilip Datwani also said “As major expenses like electricity, rent, salaries, vegetables, poultry, seafood are exempt from GST, the input credit advantage for restaurants is negligible. So, it is our humble request to the Government that they consider revising the GST rate for restaurants that are part of hotels to 12 per cent in line with other stand-alone restaurants”.

Hotel industry has also appealed that the GST rate on in-house restaurant bills be levied at 12 per cent like it would be for all other stand-alone restaurants.

Global seller Amway batted for reduction of GST rate on food supplements saying prevention of health issues must also be given similar importance as curatives. Set to complete 20 years of operations in India next year growing at a CAGR of 20 per cent, the company also said it could have grown much faster in the country but for the lack of legislation for direct selling industry.

Amway Regional President- Europe, India & Africa Samir Behl said “Today GST on pharmaceuticals is 12 per cent. If you strongly believe that prevention is better than cure, why should GST on supplements, which are preventive, be more than double that on curative? Under the current GST structure, food supplements under which its brand Nutrilite brand falls attract the top slab of 28 per cent. It has gone from 14 per cent to 28 per cent for Nutrilite and has impacted our top line. Next year we will complete 20 years. We would have actually grown faster out here but the big challenge the industry faces is about lack of legislation. There is no law which governs the direct selling industry. The industry is also working with the government so that Consumer Protection Act could be passed in Parliament, he said. I think legislation combined with a more appropriate GST will add more to the growth momentum”.

Amway, which expects its Indian operations to touch sales of USD 1 billion by 2025-26, will cross the Rs 2,000 crore turnover market next year with over half of its current sales coming from food supplements brand Nutrilite.

Sami Behl also said “Once we have legislation in place for the industry, which I feel is currently the single biggest impediment for growth, will certainly, helps a lot in streamlining and growing the industry faster.

Tata Global Beverages, the world's second largest tea company, announced the pilot launch of its first tea cafe "Tata Cha.”

Tata Global Beverages Regional President Sushant Dash said “It is our first entry into retail space; this is the pilot project we are starting with. We are planning to open four stores in the pilot phase in Bangalore. We will then consolidate, understand how the pilot goes, before we think about what the next step should be. His whole idea behind entering into Quick Service Restaurant (QSR) and tea cafe space was twofold. The first was this was a growth segment as eating out had been growing at an exponential rate second 70 per cent of consumption in the country in terms of one drink as beverage even out of home was tea”.

Company official said in a statement “The idea behind was to match the two of them given that people are going out, people drink tea, and Tata Global Beverages is best positioned to bring tea to customers, so we thought of getting into retail space and talking of tea cafe," he added. Tata Cha is designed to reflect the heritage of Tata Global Beverages while embracing local culture. The core objective was to create a space that was warm and nurture a "renewed love" for tea”.

Tata Cha will have three formats of stores large which will be about 1300-1400 sq ft, abbreviated around 700 sq ft, and kiosk which will be mostly at malls, IT parks, institutions and offices. Over the next three months the company intends to operationalize all the four stores in Bangalore. Responding to a question about launching in Bangalore, Dash said it "is one among the most cosmopolitan cities of the country and it might surprise many that there are more cups of tea that are had in country, than Coffee, our internal number show that 37,000 cups of tea as compared to 17,000 cups of coffee. It is significant difference in terms of tea and coffee."

Panel of state finance ministers suggested fresh changes on Sunday to the Goods and Services Tax (GST), including a cut in the levy at restaurants and a flat 1% tax for small traders, manufacturers and eateries that opt for the less onerous composition scheme.

Panel of five state finance ministers has suggested a flat 12% GST for standalone restaurants, whether air conditioned or not, and an 18% levy at eating joints located inside hotels. While standalone restaurants will not enjoy the benefit of input tax credit, those with 18% tax will be entitled to take credit for taxes paid by their suppliers.

While the overall incidence was expected to be lower with the gains of input tax credit eaten up by the restaurants, the levy is seen to be detrimental for consumers. The respite on composition scheme will also lower the burden for smaller eateries, which currently attract 5% tax under composition scheme.

Scheme, which also applies to traders and manufacturers with annual turnover of Rs 20 lakh to Rs 1 crore, comes with a flat rate of tax and a much lower compliance burden where only the sales details have to be disclosed with no requirement to file detailed returns with invoices. In addition, the returns have to be filed on a quarterly basis.

Those who are willing to pay tax on their total turnover, which includes revenue from the sale of exempted goods. But those who take the pains to segregate income from the non-exempted products will have to pay 1% tax on the sale of these goods.

While a final decision will be taken by the GST Council, comprising union and state FMs, early next month, the move by the panel is seen to be another attempt to assuage small businesses which have been complaining bitterly about GST as many of them were out of the tax net till the new regime kicked in on July 1.

National Association of India has said that eating will get more expensive if government goes ahead with the proposal of reducing GST rate of restaurants from 18% to 12% without input credit claims. As per media reports government are considering to bringing down GST rate from 18% to 12%.

Under the GST regime implemented on July 1, 2017, air-conditioned restaurants pay 18% GST on food. However, if the GST rate is brought down to 12%, then in the absence of input tax credit, they will not able to claim these tax rebates, resulting in an increasing in their operational costs by 7% -10%. In the earlier tax regime, restaurants were allowed an input tax credit on things like food items, cutlery etc, NRAI stated.

Ritaaz Amlani, President of the national Restaurant Association of India said” Under the earlier tax regime, the tax on processed food was at 5%, but now under GST, this has gone up to 12%. Taxes on many such inputs have gone up, so if we do not get an input tax credit, then our cost of running the restaurants will go up, leading to higher menu prices for customers. Best part about the GST scheme is complete pass- through of taxes via Input Tax Credit (ITC). ITC works in a way that all vendors and suppliers who may have earlier been in the unorganised sector are incentivised to come under the organised sector and file tax returns. Disallowing input tax credit will lead to higher operational costs for restaurants, ultimately leading to a rise in price of final products for consumers. Hopes the proposal is not implemented in its current form and that the industry’s views should be taken into consideration”.

Eating out in air condition comfort could get cheaper if a proposal to fix the GST at 12% on all restaurants is adopted by GST council. Air conditioned restaurant currently charging 18% GST and Non air conditioned charging 12%.

A government official said “It has been felt that the restaurants have not passed on the benefit of input tax credit to consumers. The lower rate of 12 per cent may be extended to cover the entire sector. The GST Council had set up a panel to look into the matter. Representations were made to the panel about restaurants not passing on the benefit of input tax credit while levying 18 per cent GST. After the imposition of GST on July 1, taxes on such services rose to 18 per cent from 15 per cent but the rationale was that input tax credit would neutralise the increase. Following lobbying by the industry, the GST Council set up a panel under Assam Finance Minister Himanta Biswa Sarma to make the composition scheme more attractive and revisit GST rates on restaurants. The panel, which had been asked to give its report in two weeks, has finalised its recommendations.”

The industry lobbied for a 12 percent rate for all restaurants but with the benefit of input tax credit kept intact.

Restaurants in Kolkata are going to appeal GST council to remove the discrimination in tax rates against eateries serving alcohol.

All restaurants who serve alcohol whether they are air conditioned or not charge 18% tax and without alcohol and no Ac counterparts charge 12%.  The Hotel and Restaurants Association of Eastern India (HRAEI) is now planning to seek a uniform GST irrespective of whether a restaurant serves alcohol or not.

Surdesh Poddar, president of HRAEI said “A large number of restaurants serve alcohol, but they rely on food sales to drive their business. The lower tax at non-alcohol joints has been eating into their business, which is unfair. Also, this discriminatory tax is an incentive to bar alcohol, which is not an encouraging sign. In Kolkata, the food and beverages sector has grown exponentially over the last decade, thanks largely to the rise in the number of restaurants serving liquor. Other than the tax discrepancy, the committee should also look into a few other grey areas. It is not clear whether star hotels serving food on the poolside, which is not an air-conditioned area, should be charging an 18% GST. There are several five-star hotels in the city which have multiple non-AC sections where food is served. We believe that there should no discrimination between restaurants on the basis of alcohol availability.”

Nitin Kothari owner of Mocambo and Peter cat said “My restaurants don’t rely on alcohol for sales, but it does attract even those who are looking at just food. People love to order a glass of beer or whisky while waiting for food to be served. If they have to pay additional tax on food for that, it’s unfair. Some extra tax for AC restaurants was fair. It has always been there but making a differentiation on the basis of liquor availability is not acceptable.”

Another owner of park street eatery said “We are pinning hopes on the committee to remove the tax discrepancy. It must be remembered that almost all leading city restaurants are AC and serve alcohol. But the tax differentiation is forcing their patrons to pay extra tax on food. It is also unfair on those who don’t order alcohol. The latter would rather go to a dry eatery. If that happens, the majority of Kolkata’s restaurants will suffer.”

Leading American restaurant Arby’s bringing back venison sandwich for one day in all Arby’s restaurant throughout America. This is for One day on October 21^st. Last year venison sandwich was sold in selected Arby’s store and fro that it became popular. Last year when the chain introduced its farm-raised venison sandwiches, they sold out in mere minutes in the handful of states where they were offered.

Chief Marketing Officer of Arby’s restaurant said “if people are interested in trying the sandwich in only way to guarantee they can get one is to get there when we open or little before.”

Arby’s sandwich obtains its venison from New Zealand. The venison sandwich features slab of milk with crispy onion.

Leading dairy firm Mother Dairy has increased the price of its loose vended milk or 'token milk' by Rs 2 per litre in Delhi-NCR .

The company, however, has kept the prices of poly pack milk unchanged.

The price of token milk has been raised to Rs 40 per litre from existing Rs 38 per litre, Mother Dairy said in a statement.

Mother Dairy sells 30 lakh litres of milk per day in the Delhi-NCR market, of which 20 per cent is token milk.

The company said the retail price of token milk has been hiked due to "increase in the price of raw milk by Rs 3 to Rs 3.5 per kg over the last one year. It further said the company passes on close to 80 per cent of its sales realisation from milk to the farmers".

In the last 6-7 months, procurement prices have gone up by Rs 1-1.5 per kg.

The GST Council tweaked rules on Friday to make life simpler for small businesses and exporters and also cut rates on 27 products, including man-made yarn, which was a key demand of the textiles sector, in a bid to mollify those complaining about the new tax regime.

Similarly, the tax rate on rotis and khakra was cut along with savouries and ayurvedic and homoeopathic medicines. PM Narendra Modi was quick to comment that the decisions would help small and medium businesses. The GST Council on Friday decided to review several issues, including the tax structure for restaurants, amid complaints that several of them were not passing on the benefit of input tax credit through price cuts.

FM Arun Jaitley said there is an impression that large restaurants with 18% tax have not reduced the prices despite the benefit of input tax credit being available. A group of state ministers, which will submit its report in two weeks, will revisit the taxation structure for them and examine if the liability can be reduced an alternate structure should be put in place.

The GoM, which Jaitley said will set up soon, will also examine if the Rs 1-crore turnover, which is the threshold for the composition scheme, should include revenue generated from the sale of exempted goods. A food trader for instance, may be selling unbranded food pro ducts such as flour and daal along with packed and branded items, which face GST. Currently, all sales are included in calculating the turnover and an exemption is expected to result in massive leakages, tax experts warned.

Describing 3-month old GST as a "fairly encouraging exercise",Nestle India CMDSuresh Narayanan said there are a few operational issues that are still being ironed out. Since the early part of July we had settling issues but August was certainly better and September has also been reasonably good as far as settling into the GST regime is concerned.

As far as the FMCG industry is concerned, he said, with the passage of time there would be improvement and settling into the new indirect tax regime will turn better.

FMCG companies had witnessed slowdown and reported tepid sales in the April-June quarter because of destocking by trade partners, who purchased limited inventory due to uncertainty ahead of implementation of the Goods and services tax (GST) from July 1.

When asked about the company's plans of expanding the product portfolio and getting into new categories, Narayanan said it will be looking at expanding the scope of existing products and also selectively getting into new categories.

Reflecting on the company's ambition of double digit growth, he said in terms of reported sales there is a GST impact of almost 525 basis points that gets impacted on the company's sales, therefore the number might be a little lower that what a double digit would be.

Naraynan also said "As far as the company is concerned, we had recorded an 8.8 per cent growth last quarter and we had impact of GST in that and we were within the whisker of what we were looking at and therefore the ambition of double digit growth is something I would not like to lose right now.”

The BBMP may stop serving dinner at the 151 Indira Canteens on Sundays, taking into account the low footfall and the need for the kitchens to take a break. Chief Minister will take the final call.

Sources said the turnout is 50% less on Sunday night as it's a holiday. Service providers want time to clean the canteen area once a week.

A BBMP report showed the canteens in Subhash nagar near Majestic (ward No. 95) and Jayanagar (ward No. 153) had the highest footfall in September. The Palike then decided to increase supply-600 plates of breakfast, 600 for lunch and 400 plates for dinner in Subhash Nagar. In Jayanagar, it was 600 plates of breakfast, 600 lunch, and 300 plates for dinner. After October 2, when 50 more canteens were launched, the out let near KR Market saw the highest footfall of 1,500.

The project was launched to provide affordable food to citizens, it could be anybody as affordability is subjective. “When the rich walk into the canteens, it only means the facility provides good food in a clean environment. We cannot stop anyone from using the facility.

Eating out at a restaurant has become an indulgence after the implementation of goods and services tax (GST), as business is down by an estimated 35%, say restaurateurs across Gujarat. Customers seem to be feeling the pinch of 18% GST imposed on the service sector.

Narendra Somani president of the Hotels and Restaurants Association said “Restaurant business has certainly dipped after GST, even over weekends. Regular customers also don’t visit restaurants as often as they used to.”

Dilip Thakkar, a partner at a city-based restaurant said “A number of restaurants have seen a 50% hit to business. “With 18% tax, bills have been rounded up and prices have risen by 20% at most restaurants. For instance, a thaali which earlier cost Rs 300 will now be billed at Rs 360. A family of four visiting four times a month now visits just once or twice a month.”

Even in Surat, business is down by at least 20%-25%, according to South Gujarat Hotel and Restaurant Association (SHARA) vice president Sanat Reliya. Home delivery and takeaway businesses are also badly hit and have declined by at least 50%.

A number of daily use products ranging from idli/dosa batter to kitchen gas lighter may cost less as the GST Council is considering lowering rates on these items. Tax rates on over two dozen products are being sought to be lowered by the GST Council after anomalies in their fixations were pointed out, official sources said.

To deal with businesses that are deregistering their brands post GST to avoid taxes, the fitment committee has proposed to the GST Council to consider May 15, 2017, as the cut off date for considering as a registered brand for the purpose of levy of GST, irrespective of whether or not the brand is subsequently deregistered. A final decision in this regard would be taken by the GST Council, headed by Finance Minister Arun Jaitley and comprising representatives of all states, at its next meeting on September 9 in Hyderabad. Unbranded food items are exempted from GST, whereas branded and packaged food items attract 5 per cent rate. Hence, many businesses are deregistering their brands to avoid the levy.

Sources said that the GST Fitment Committee has approved new rate structure of over two dozen items and forwarded the proposal to the apex decision making body. The GST Council in the August 5 meeting considered and approved lower rates for some of these items and the remaining will be taken up in the next meet on September 9, they said. Sources, however, could not state the items on which the tax rates have been lowered. They said GST on dried tamarind has been proposed to be lowered to 5 per cent from 12 per cent currently and so will be the case in roasted gram. Custard power would attract 18 per cent GST as against 28 per cent currently while idli/dosa batter would be charged with 12 per cent tax against 18 per cent currently. Oil cakes would be charged with a uniform 5 per cent GST irrespective of end use as against present practice of nil rate on oil cake for animal feed. GST on dhoop batti, dhoop and other similar items has been proposed at 5 per cent, down from 12 per cent at present. This brings dhoop batti at par with agarbattis which attract a 5 per cent tax rate. Plastic raincoast, rubber bands, rice rubber rolls for paddy de-husking, computer monitors and kitchen gas lighters would see GST being lowered from 28 per cent to 18 per cent.

GST on corduroy fabrics is to be lowered to 5 per cent from 12 per cent currently and the same is to be done for saree fall. Tax on textile caps is to be lowered to 12 per cent from 18 per cent and that on idols made of clay to 5 per cent from 28 per cent currently. Brooms and brushes would be tax free as against 5 per cent GST levied currently while rosaries and prayer beads would be charged with 5 per cent tax as compared to 18 per cent now. Hawan samagri would be charged with 5 per cent GST as compared to nil now. 

The government has decided to plug a loophole for food companies, which were deregistering their brands to avoid paying 5% goods and services tax (GST).

Sources said to check “tax avoidance”, any brand which was registered on or before May 15, will be deemed to be registered for paying GST, even if it is successfully deregistered. The registration under the Copyright Act or similar law abroad on or before May 15 will be treated as valid. While unbranded cereals, pulses and several other food products do not attract GST, those sold in “unit containers” and sold under a registered brand name attract 5% levy. As a result, several brands, including some prominent basmati rice players, had deregistered some of the brands to avoid paying GST.

Industry representatives have sought an end to the differential tax treatment, which the government is not keen on. The government believes that unbranded food products should not face a levy as they are consumed by the poor. While this had attracted the finance ministry’s attention a couple of weeks ago, the issue has now been taken up at the level of the GST Council, headed by finance minister Arun Jaitley, with his counterpart from the states being members.

On Saturday, Jaitley had said that the government had found a way to check avoidance but did not elaborate on the strategy. Sources said that the plan using May 15 as the cut-off date is expected to be finalised at the GST Council meeting next month.

The Goods and Services Tax (GST) has caused a 10-20% dip in customer footfall at eateries in Pune. These include fine-dining restaurants and lounges. Many attribute this to the 12-18% GST on food bills.

Before GST came into effect, many AC/non-AC restaurants had opted for the composite VAT scheme, which meant VAT was being paid by restaurants, while a 6% service tax was being charged to customers. In a course correction bid, many restaurants have slashed menu prices by 5-10% to bring them at par with pre-GST rates. But they still await footfall to normalize. “The biggest factor is the 18% on food as against the 11% tax charged earlier,” said a city-based restaurateur in Aundh. “Customers now feel that eating out has become dearer, and have cut down on this luxury,” said the restaurateur, whose customer inflow dipped from 200 per day to 150 since July 1.

Smaller restaurants in areas like Deccan, Karve road, JM Road and Camp have also been affected, with a 10% drop in customers, said Ganesh Shetty, president, Pune Restaurants and Hoteliers Association (PRAHA). “Before GST, smaller restaurants did not have service tax. They only had the 5% VAT, which was included in the menu prices. After GST, the separate tax of 12% or 18% is putting off customers,” said Shetty. John Chen, owner of Kimling restaurant, said, “We try to explain to the customers that with GST’s implementation, they have no option but to pay the GST regardless of which AC restaurant they visit,” he said. “This is not the case only for smaller restaurants, but also for those in Koregaon Park and Mundhwa,” said, Vikram Shetty, PRAHA vice president. 

Meetings, Incentives, Conferences & Exhibitions (MICE) segment is the hospitality industry's key revenue source. Hoteliers however are complaining that due to the anomalies created by GST, the hotels have seen a fall in the demand in the segment. This has added to the pain of the liquor ban near highways. Having said that liquor is another major revenue source.

There have been huge cancellations or postponements of pre-booked events on account of an anomaly in GST, that MICE activities held in hotels outside of home state would not be eligible for Input Tax Credit (ITC), said a top official of Hotel & Restaurant Association of India (HRAWI). "There is an overall reduction in MICE bookings in hotels across India as compared to the same period last year, advance bookings are being cancelled and new bookings are not happening," rued HRAWI Preisdent Dilip Datwani.

Coming after the recent liquor ban on highways, GST has acted as a double-whammy to the industry already suffering reduced revenues and Datwani apprehends many establishments may be compelled to scale down operations or shut down, with wide ramifications. In view of MICE Tourism as an important and the fastest-growing segments of the hospitality industry, Datwani urged the government to tackle this particular aspect of GST which has a potential to disrupt growth.

"Businesses may still have digested the high GST but without ITC it just becomes unviable. MICE Tourism is too important a segment for the country to overlook," Datwani pointed out. On the new slabs for the hotel industry, he said the 28 per cent GST for rooms with tariff of Rs 7,500 and above is one of the highest in the world and will seriously restrict cash flows. Besides, the tax percentage will be determined based on the published or declared rate which is creating lot of hardships for the industry.

"We have appealed to the government to remove this condition and determine the tax percentage based on the actual transaction value and review the ITC clause for inter-state accommodations," Datwani said. Former president of HRAWI and Federation of Hotels & Restaurants Associations of India (FHRAI) Kamlesh Barot said in view of the ITC clause, corporates will arrange their MICE in the same state where they are GST-registered or take their businesses abroad with lower tariffs/taxes. "We are in touch with the Tourism Ministry and hope the clause will be altered to encompass MICE for ITC and provide relief to the industry," Barot said optimistically With the late industrialist JRD Tata as one of its original founders in 1950, the 67-year old HRAWI members include all major hotels from budget to deluxe and five-star categories in entire western India.

The profitability of the organised basmati rice companies is likely to be negatively impacted as the same will be subject to 5% tax under the Goods and Services (GST) Tax regime that was implemented from July 1, 2017, said credit rating agency ICRA.

ICRA said, "Earlier basmati rice was subject to value-added-tax (VAT) or was tax free in different states. However under GST, basmati rice has been included in the category of branded cereals registered in the Register of Trade Marks, that attract a levy of 5% GST."

This is likely to put the branded players in a disadvantageous position compared to the unbranded rice segment as it would further widen the pricing gap and may result in some transition of demand from branded to unbranded basmati rice, it said.

ICRA added, "Branded basmati rice companies will see some erosion of profitability as they would look to absorb the GST impact and maintain the pricing parity with the unbranded segment." 

The government said on that free food supplied in anna kshetras (food areas) run by religious institutions have been kept out of the GST ambit. Besides, prasadam distributed by religious places of worship like temples, mosques, churches, gurdwaras and dargahs, would not attract any Goods and Services Tax (GST).

The government rejected media reports which suggested that GST would be levied on free food supplied in anna kshetras run by religious institutions. A statement from the finance ministry said, "This is completely untrue. No GST is applicable on such food supplied free."

However, some of the items and services required for making prasadam would be subject to GST, including sugar, vegetable edible oils, ghee, butter, service for transportation of these goods and so on.

The ministry said, "Under the GST regime, it is difficult to prescribe a separate rate of tax for sugar, etc, when it is supplied for a particular purpose. GST, being a multi-stage tax, end use-based exemptions or concessions is difficult to administer. Therefore, GST does not envisage end use based exemptions."

It added, "It would, therefore, not be desirable to provide end use-based exemption for inputs or input services for making prasadam or food for free distribution by religious institutions."

Hardcastle Restaurants, the franchisee of McDonald's for west and south India operations, said the GST would increase the operational efficiency and help it add new stores in non-metro places.

The company, which now operates around 260 McDonald's restaurants, would have a uniform price across all states in southern and western regions post GST.

Amit Jatia, Vice Chairman, Hardcastle Restaurants, said, "The state borders are now going away slowly and this would increase our operational efficiency, which will help us as well."

Now, a single truck carrying supplies could cater 2-3 states in one trip, earlier it was restricted to one particular states due to tax differences.

The company has brought uniform price by slashing price in southern states where pre-GST taxes were high and by hiking rates in states like Maharashtra.

Jatia added, "In southern states where the prices were more than 18 per cent, our burger prices have come down and some states where the taxes were lower than 18 per cent, the rates have slightly gone up."

States like Karnataka had 21 per cent tax under VAT regime while Maharashtra had 14 per cent and all have now come to 18 per cent.

He said, "It is a huge advantage from retail point of view."

On being asked that the margins of stores located in metro and tier II & III places would be different, Jatia said, "Yes, there are. But by giving a constant price to our consumers is useful although efficiency cost would be different in state to state".

Union Minister of Commerce and Industry, Nirmala Sitharaman has denied that peanut brittle was taxed more under Goods and Services Tax (GST) than pizza, and said such rumours were being spread by the social media.

While addressing a meeting to give clarifications on GST in Tamil Nadu, she said, "Only 5% GST was imposed on peanut brittle, whereas 18 per cent GST was levied on pizza served at restaurants and 5% on pizza breads that can be used in homes or eateries."

On a request to exempt Idly batter and match boxes from GST, she said that the same would be placed before the GST council for consideration.

She said, "GST was not aimed at increasing the revenue but monitoring the 85 per cent informal economy of the country which was functioning without any bank transaction."

Stating that BJP had earlier opposed GST as it did not have the compensation component for manufacturing states like Tamil Nadu, Madhya Pradesh and Gujarat, she said, "Now we have introduced compensation for the manufacturing states."

She added, "Both the Central and State governments will now get equal revenue from GST."

The minister said, "GST rates were fixed in consultation with all the state governments after various rounds of meeting of GST councils with the participation of finance ministers of 29 states, seven union territories and Union Finance Minister."

She added, "I believe Tamil Nadu representatives would have discussed the business concerns of the state in the council."

Sitharaman also urged the small and medium businessmen to registrar under GST. 

With GST coming into place from July 1, tea traders, brokers along with Tea Board and tax commissioners have sorted out the billing issue on how to impose the new tax during auctions.

Kalyan Sundaram, Secretary, Calcutta Tea Traders Association (CTTA), told PTI, "The billing issue relating to imposition of GST at the auction houses has been sorted out."

Sundaram said that auction (sale number 27) in Calcutta will start today from 2pm and continue till Saturday lunch time.

This sale was supposed to be held on Tuesday and Wednesday, but was postponed due to the billing issue on how to raise GST (both CGST and SGST) invoice after auction is complete.

According to him, it had been decided that once tea is sold at the auctions, the producers would raise a tax invoice to the broker.

This tax invoice would comprise 2.5 per cent SGST and 2.5 per cent CGST.

Unless this was done, then buyers, sellers and brokers would not be able to avail of input tax credit.

Sundaram said, "Auctions in Guwahati and Siliguri had started from 9 am today, at Coonoor it was also being held today."

He said, "Auction at Coimbatore would start later."

He further added, "Tea Board had organised a workshop comprising Assam's tax commissioner, commercial tax commissioner of West Bengal and Commissioner of Central Excise."