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Gst rate for restaurants having t/o > 1.50 cr.

Keyur Kotdiya (Practicing whole time CA) (14 Points)

05 March 2019

There is composition scheme for all the dealers including restaurants having threshold limit is 1.50 cr and GST rate is 5% without ITC but suppose if any person having aggregate t/o > 1.5 cr under restaurants then GST rate is same or any change in that..??

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9 Replies

PUSHPA (.) (110 Points)
Replied 05 March 2019

remain same

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PUSHPA (.) (110 Points)
Replied 05 March 2019

I think Turnover is Still 1 Crore for Composite Scheme. 1.5 cr is recommended not yet notified

Nivedita (SME - Finance) (758 Points)
Replied 05 March 2019

*CBIC has notified the increase to the threshold limit from Rs 1.0 Crore to Rs. 1.5 Crores.

Keyur Kotdiya (Practicing whole time CA) (14 Points)
Replied 05 March 2019

It means there is no threshold limit for restaurants because GST rate will be the same with or without the scheme..??

Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 05 March 2019

As of today the Threshold limit for composition dealer is 1 crore

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Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 05 March 2019

Sorry for My above reply . Yes the threshold limit for composition dealer has been Increased to 1.5 Crore by Notification 2/2019 CT , The Above Notification notify the above limit mention in Amendment Act 31 of 2018

shanmugapriya viswanathan (2 Points)
Replied 09 April 2019

I have a doubt here. how s it possible if restaurants chose composition scheme but cannot collect tax, however under normal situation can collect tax at same rate as composition rate

CA Aravind Penugonda (Chartered Accountant) (311 Points)
Replied 09 April 2019

Restaurant service providers are eligible for composition if T/O is below INR 1.5 crores subject to condition that No ITC, cannot collect taxes from customers, no inter-state procurements.

Where he has not opted for composition, then he shall be liable to pay GST at applicable rates. However, in this scenario, he can collect taxes from customer and remit to ex-chequer.

The option adopted by the restaurant can be checked based on the invoice or bill of supply issued by him for the service. In case, he issues Bill of Supply, then it can be implied that he has opted for Composition scheme. Else, it can be implied that he has opted for Regular scheme. However, this can not be the sole criterion/ deciding factor.

Nitin (Chartered Accountant) (118 Points)
Replied 09 October 2019

The GST rates for restaurants with turnover more than 1.5 crore will be 18% (with ITC) and not 5% (without ITC). The rate will be 18% since restaurant is a service industry and the applicable rates for services under GST is 18%.

If the rate is kept at the same level i.e. 5% even after the dealer exits the composition scheme then it will be a loss to those restaurants who are under composition scheme. Since under composition scheme the restaurant will pay 5% on turnover from its own pocket, and if it converts to the regular scheme and the rate is kept at 5%, then the restaurant will collect the GST from the patrons and pay to the treasury. So, you see the dealer under composition scheme is under complete loss, and hence the rate for a restaurant regular dealer is 18% with ITC and not 5%.