GST was introduced in India on 1st July 2017, and ever since some people criticised GST on several fronts. Now, Government slashed the rates to 5% from 12% for non-air conditioned restaurants and from 18% for air-conditioned restaurants. Apart from this tax rates for 200 items have also been reduced by the government. But some of the restaurants doesn't give benefits of this revised rate to customers and the final bill amount remains the same for the customer.
Yesterday, after the new rates came into effect, people were thinking that now their restaurant bills would reduce as the companies had announced that the rate cut will be passed on the customers. However, nothing of this sort happened and the bills remained the same even after the reduction in tax rate.
Angry customers on Twitter lashed out at fast food chains McDonald's and Starbucks along with pictures of food bills before and after last week's GST cut. Many pointed out that McDonald's has actually increased the MRPs (Maximum Retail Price) after the rate cut making the total bill nearly the same.
Tweets on Restaurants GST Rate
Shame on you @mcdonaldsindia Not passing on GST benefit to customers should be a crime @FinMinIndia Please take action!
When 18% was introduced it was straight away transferred to the consumers but when reduced they adjusted. Cool!!! They think of doing such malpractice in India because they know nothing happens here.
McDonald’s on GST Rate Drop
When McDonald’s saw that the customers are getting angry, it tried to calm them down by saying that the operating costs have gone up despite the cut in GST rates. McDonald’s stated that it used to get input tax benefit on various expenses such as rent, food and other things but as this facility is not available, the costs have increased. The outlet further said that it has revised the bill structure in such a manner that the final bill remains the same as it was before the reduction in GST rates.
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