"These revisions in rates are expected to reduce prices and increase consumption and thereby bring growth for the consumer products and retail industry," EY India said in a statement.
The council made major changes to the way restaurants will be taxed. According to the changes all restaurants will now be levied GST at 5 per cent, but will not be able to claim input tax credit (ITC) benefits.
However five-star restaurants within starred-hotels with room rent above Rs. 7,500 will attract 18 per cent and can still avail ITC benefits, the council said. Outdoor catering will attract 18 per cent GST along with input tax credit benefits.
The Federation of Hotel and Restaurant Associations of India (FHRAI) welcomed the GST
Council's decision and FHRAI President Garish Oberoi said in a statement: "We are extremely thankful to the government for making these much required changes in the GST regime. This will help restaurants across India rationalise tariffs."
Meanwhile the GST Council's other decision of doubling of turnover limit for composition dealers to Rs 2 crore is expected to make it easier for small and medium businesses to be tax compliant. This will have a huge impact on the GSTN portal as well because there will be a big rise in taxable persons opting for the composition scheme and they will be required to file quarterly returns only, industry reports said.
To read the full list of what items will get cheaper after the tax reductions click here.