The Gujarat High Court has issued a notice to the Centre seeking to know why the option of input tax credit under goods and services tax (GST) regime is not available for restaurants, unlike others.

This was in response to a writ petition filed by Hardcastle Restaurants, which is the master franchisee for McDonald’s, against the Centre, asking for the option to avail of input tax credit by paying a higher rate of tax.

GST rate on restaurants was cut from 18 per cent to 5 per cent in November 2017, but without any input tax credit. When they were charged GST at 18 per cent, they could avail of the input tax credit.

The National Restaurant Association of India, which represents more than 500,000 restaurants, had this year written to the revenue secretary, arguing that the denial of input tax credit had adversely impacted the sector, leading to closure of 20,000 outlets last year.

The restaurants’ body suggested for availability of option to either claim the input tax credit with a GST rate of 12 per cent or pay 5 per cent GST without that.

The writ was admitted by the Gujarat High Court on November 14. A notice was issued to the Centre, which has time till December 11 to respond. #casansaar (Source - Business Standard)