GoM suggests slashing tax rate to 1% for manufacturers, restaurants

The ministerial panel working to make GST composition scheme more attractive has suggested slashing tax rate to 1 per cent for manufacturers and restaurants, while easier norms for traders opting for it. 

Currently, manufacturers and restaurants with turnover up to one crore rupees pay GST under composition scheme at 2 per cent and 5 per cent respectively.The same for traders is one per cent. In its second meeting, the Group of Ministers, headed by Assam Finance Minister Himanta Biswa Sarma, yesterday also suggested doing away with the tax rate distinction between



AC and non-AC restaurants, those which are not covered under composition scheme, and tax them at 12 per cent with input credit.

It also suggested that eating out at hotels, which has room tariff of more than 7,500 rupees should attract an uniform 18 per cent tax rate instead of any separate category for 5- star hotel.

The GST Council, chaired by Union Finance Minister Arun Jaitley and comprising his state counterparts, on November 10 in Guwahati is likely to take up the recommendations of the GoM, which was set up earlier this month.