New Delhi ∙ Directorate of GST Intelligence for tax loopholes for resto-bakeries. The GST Intelligence Directorate General has suggested that even if the restaurant operates along with the bakeries, the GST rate should be paid at the same rate as the bakery. Hotels are taxed at 5% while bakeries are taxed at 18%. The GST department has started sending penalty notices to bakeries that do not pay taxes. In the first phase, notices have been sent to leading resto bakery chains. There is also a proposal to conduct GST inspection in resto-bakeries in all states.

Most of the bakeries in the state are accompanied by restaurants. The same dish that is sold at 5% tax at restaurants is sold at 18% tax at the bakery. That means if you buy a burger worth Rs 100 from a restaurant for Rs 105, you will have to pay Rs 118 at the bakery. Due to this, most of the resto-bakeries follow the GST slab in restaurants to reduce the rates. But due to the confusion in the GST classification of business establishments, they have to pay additional tax and demand that resto-bakeries should be given a separate category like resto-bars.