The mantra of the new-age is “work hard, party harder,” and every party needs some drinks to make it exciting. It is common for us Indians to be drinking after a hard day’s work, and to let our hair down by enjoying a cold beer during the weekends. Alcohol prices vary in India in accordance to the state you are in, but what role do taxes play in it, and how did the recent inclusion of Goods and Services Tax (GST) change the drinking scene in the country? Let us take a closer look at how GST has affected alcohol consumption in India.
What is GST?
GST is an indirect tax levied upon goods and services, without any other taxes coming into play. This means that this system will put aside any other form of indirect taxes, thus making it the only form of permissible tax. This will therefore streamline the tax system in the country, and bring about a unified tax rate for the nation. The GST rates are 0%, 5%, 12%, and 18%, with 18% being the highest payable GST. So the other taxes formerly levied upon goods such as, central excise duty, surcharges, state-level value added tax, and others are no more in play.
So for those of you who are planning to eat out and have a great time, GST will be levied as 12% for Non-AC restaurants, and 18% for AC restaurants. And where does alcohol stand in this?
Alcohol and GST
Last week when I went to a popular pub in Vasant Kunj with friends, we were handed a bill that has 9% state GST and 9% Central GST (18% in total), along with VAT on alcohol, and services charge. Now isn’t this a tricky one? So after considerable research, we have figured out that there still seems to be some sort of ambiguity regarding alcohol and GST.
But we are here to tell you that alcohol has been kept out of GST, which means the VAT which is levied on alcoholic drinks is just about right. This kind of makes things a little steeper when dining out, but the law of the land as of now stays so. Now Service Charge as defined by the government is not something compulsory, which means that you do not really have to pay service charge if you do not wish to, but restaurants still insist on levying this charge.
As far as buying alcohol from a liquor shop is concerned, the prices remain the same as of now.