Relief for restaurant goers: significant cut in GST

Amid the coronavirus pandemic and surging number of Covid-19 cases in Punjab, the Usman Buzdar government presented a budget worth Rs. 2,240.7bn for the financial year 2021. The budget was an attempt to balance economic growth and development along with providing relief to the masses effected by the pandemic.

Among the Covid-19 mitigation measures was a significant reduction in the General Sales Tax at restaurants on payments made through debit and credit cards. GST will be charged at 5% (previously 16%) on services provided by restaurants including cafes, food (including icecream) parlors, coffee houses, coffee shops, deras, food huts, eateries, resorts and similar cooked, prepared or ready-to-eat food service outlets etc. The above change is effective July 1, 2020 as the bill was approved by the Provincial Assembly of Punjab.

Restaurant owners may also take advantage of this and encourage payments via debit/credit cards ultimately boosting their sales and those who do not have facilities for card payments should install POS (point of sale) machines to attract customers.

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