After reduction in GST rates, India Today conducts reality check across eating joints in Delhi

A day after social media outrage over McDonald's enhancing base price of items, India Today conducted a check at various eating outlets in Delhi.

The revised Goods and Services Tax (GST) rates since November 15 has generated a mixed response among owners of eateries. Initially in July, the government announced a slab of 18 per cent on AC and non-AC restaurants, which has now been reduced to 5 per cent.

This has brought some relief and cheer amongst consumers. However, reports soon trickled in of restaurants and fast-food joints increasing base price of products. With this, there has not much impact on the bill generated.

One such post was shared on Twitter with the bill reflecting the minute change after the revised rate.

While McDonald's accepted the increase in price of product, several other restaurants have opted to wait and observe the impact to take a call on change in price.

Satish Aggarwal, owner of Bengali Sweet House, central Delhi, said, "We will be forced to contemplate an increase in base prices because the rollback used to pay our suppliers (during previous GST) has been closed. The impact of reduced GST is still not clear in the market. Customers are benefitting from reduced slab but there is no obvious enthusiasm."

Bengali Sweet House is waiting for the wedding season to understand the GST impact.

"We are expecting an increase in the volume during the wedding season. Due to the rollback there has been a huge impact, ie, around Rs 10,000. If we decide to bear a part of the burden and increase a little amount then eventually, the volume will enhance and business will blossom. Imposing the entire burden on customers will be unfair. Customer benefit is the ultimate priority and so we will wait and observe. We are not considering price increase right now," added Aggarwal.

Meanwhile, Cafe coffee Day (CCD) outlets across the national capital have revised prices since the government announced the revised rate. A notice put up at payment counters in CCD outlets confirmed the same. However, no company official or manager was willing to speak on record.

CCD outlets have put up the notice confirming the change in price.

McDonald's, in its defence, said, "GST has come down from 18 per cent to 5 per cent, but input tax credit has been withdrawn. With this, our operating costs have gone up by 10-12 per cent. After taking the cost into account, the effective tax benefit would have been less than a per cent."