I PAY MORE FOR MY COFFEE. YOU GSTTTTT~~~~
Earlier, Only Vat @ 2% is applicable for Non A/c Restaurants (in chennai) and no service tax. And Vat @ 14.5% and Service tax @ 6% is applicable for A/c Restaurants; Thus total old tax impact on my coffee was 20.5%. So GST reduces the tax impact on my Coffee
But issue is when i have my coffee at starbucks , my tax impact goes down and it goes up if I have coffee at other regular branded restaurants. Why ?? But obviously i need to pay extremely more at starbucks for "so called " Coffee - I hate it from my tongue.
Why tax is more for coffee at regular branded restaurants - like saravana bhavan, A2B, vasantha Bhavan ????
The TN VAT Act has prescribed VAT rate as 14.5 % for branded foods but most of restaurants claims that their foods are not branded and only restaurant name is branded and carries registered trade mark. Hotel Saravana Bhavan sells coffee with VAT @ 2% and Pre-packed foods @ 14.5%. This issue was in dispute with court of law. Now GST is fixed at 18% (by keeping the service tax 6% and and VAT 14.5% in mind). Hence we have to pay more GST for having coffee at regular walk-in A/c restaurants.
But few restaurants plays foul game to people and puts hoardings that they are taxed more in GST and hence there is price rise.