Why GST council giving builders an option
What will happen is most of the builders will charge the high rate to home buyer but will not give ITC benefit.
So whats happening is Govt not trusting these builders like restaurant owners to pass gst benefits to consumers. So why give them the option for even 1 year. more
This does not mean the restaurants are not cheating, they do cheat and on a massive scale.
A restaurant typically prepares upwards of 50 snacks, if it also serves meals the preparations are more than 100. And the same ingredients are used in multiple cuisines
Let us consider simple case of MASALA DOSA. Here you have ingredients with GST rates of 0% to 28%, later being dry fruits. Typically there are about 8 ingredients for this, may be mor or less.
In order to calculate input GST they must know the quantities of each ingredient used and the purchasing prices of all the ingredients, which vary with the season.
Just imagine how a restaurant will standardise these inputs and GST.
The simplest thing would have been having a single GST rate for all food ingredients, say 5%. And it would have been possible to arrive at a reasonable Input GST.
Remember, in India the cost of goods vary widely from place to place. more