Pay through the nose for eating out in Karnataka

Eating out at a non-AC restaurant in Karnataka will be three times costlier, while AC restaurant bills will almost double after the GST roll out on July 1.

Staying in hotels, except five-star, will be cheaper by a few hundred rupees under GST regime as the GST Council on  Friday pegged the tax rates for hotels other than five-star at  18%.

Karnataka currently levies only a 4% VAT on non-AC restaurants and no service tax. Under GST regime, all non-AC restaurants will be taxed at 12% after all the local levies are subsumed under one tax.

On AC restaurants, the state levies a total of 10%, including service tax at 6%. Post GST, a cumulative 18% will be levied on AC restaurants which also serve liquor.

Staying in hotels across Karnataka will, however, be much more cheaper because the state now levies a luxury tax of 8% even on hotels with tariff below Rs 1,000 a night.

Under GST regime, stay in hotels charging tariff below Rs 1,000 a night is tax exempt.
A 12% tax is proposed to be levied on hotels with tariff between Rs 1,000-2,000 a night under the GST regime. In Karnataka, 17% tax is being levied on these category hotels now.

Staying in five-star hotels will, however, be costlier in Karnataka as the new GST proposed a 28% levy, while the state government taxed these luxury hotels only at 21%.

Chewing gums, chocolates, shampoos are luxury items

Chewing gums, chocolates, shampoos and razors are luxury items under the GST.
The GST Council on Friday put these commodities in the bracket of the highest 28% tax rate.
Items such as goggles and cookers have also been placed in the same tax bracket.
The GST Council had earlier said that only luxury and sin goods would be taxed at 28%.

It had fixed five slab rates at 0%, 5%, 12%, 18% and 28%. The council had also said that all the cess would be subsumed in the GST, but the fine print on Friday suggested that cess would be levied in the range of 1% to 15% on cars, including luxury vehicles.Some of the sin goods such pan masala will attract a cess of over 200%.