News Roll
GST will reduce your restaurant bills but only just
I
t was good news for consumers when the GST tax rates were revised to a uniform 5 per cent from 12 per cent for non-air-conditioned restaurants and 18 per cent for air-conditioned restaurants . Will this lead to a significant reduction in restaurant bills ? Let us take a look .
Says Aditya Singhania , DGM-GST , Taxmann , “ the rates have been significantly reduced from 18-12 per cent to 5 per cent on the output side but at the cost of Input Tax Credit ( ITC ) being withdrawn . The blocked ITC is certainly going to be a part of the cost of the menu prices as no restaurant is going to bear the same from its own pocket and it appears that they are going to recover the same from the customers .”
Rahul Singh , Founder & CEO , The Beer Cafe and also the Vice President of National Restaurant Association of India elaborates , “ on 15th November , the restaurants were moved to a 5 per cent flat GST without ITC , which means that the input tax which is in the range of 4 to 12 per cent becomes a cost to the restaurant . The menu base price increases from `100 to `104-112 ( depending on the restaurant input taxes ). And the customer would pay 5 per cent GST on this base price .”
The overall bill to the customer still would be lower than the `118 paid earlier , but the reduction in prices will not be as much as expected .
Gold demand dips 24 per cent post GST
GST and anti-money laundering legislations pertaining to jewellery have severely affected the segment in India , with gold demand in the third quarter of 2017 slipping 24 per cent to 145.9 tonne . During the same period last year , gold demand stood at 193 tonne . The fall was a result of retail buyers staying away from jewellery transactions , according to a World Gold Council ( WGC ) report . In value terms , gold demand plummeted 30 per cent to touch `38,540 crore . Investment demand for the precious metal fell 29 per cent to `8,200 crore compared to `11,520 crore in the third quarter of 2016 .
However , WGC is upbeat about the yellow metal ’ s prospects , thanks to rollback of the AML legislation and progress made in GST transition . The recovery is expected to take root in 2018 . or even single GST rate ,” says Vishal Raheja , DGM , Taxmann .
Concerns around transmission of these benefits , however , persist . “ The government should ensure that the benefit of the rate reduction goes to the consumers . It appears that after this mass rate reduction various anti-profiteering problems may kickoff for businesses which would not pass on the benefit to the consumers ,” cautioned Abhishek Rastogi , partner , Khaitan & Co .
SBI General introduces a simplified home insurance policy
The complex structure and wordings of home insurance policies are often seen as impediments to pick up in demand for such products , despite rising awareness around the need for insurance post the earthquakes and floods in the last couple of years . To bridge this gap , insurers like New India and Bajaj Allianz have rolled out simpler products . Private non-life insurer SBI General Insurance has joined the list with the launch of its Simple Home Insurance Policy — a package product providing coverage for a tenure of up to three years . It allows policyholders to cover apartments on an agreed value basis as against reconstruction cost approach . It provides protection for your house against public liability , personal accident , breakdown of appliances and so on . House owners as well as tenants are eligible to buy this policy . The product also offers discounts to those choosing longer tenures of two and three years .
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Outlook Money December 2017 www . outlookmoney . com