Restaurants and hotels across the city will remain shut on April 29 in response to a call by the Hotels and Restaurants Association of India (HRAI) to protest against the new service tax by the central government.
Earlier this tax was only meant for air-conditioned restaurants serving liquor, but now it is applicable to all air-conditioned restaurants.
Explaining their reason to shut shop, Dinesh Advani, president, Hotels and Restaurants Association, western region, said, “We have sent representations to the finance ministry, and have been in dialogue with government officials, but there seems to be no response from their side. Hence, we see this bandh as a way to get our message across to the government.”
The hoteliers have demanded the withdrawal of the service tax proposal as they feel it is double taxation by the government.
Kamlesh Barot, owner of Maharaja Restaurant in Crawford Market, said, “It is unconstitutional to levy double taxes, in this case VAT by the state government and service tax by the Centre. This is apart from the luxury taxes that still remain. It is difficult for us to pay all the taxes at the same time.”
He added, “With the introduction of service taxes on all AC restaurants, food prices will increase by about 4.4-5%. A more rational taxation is what is expected from the government: either VAT or service tax is what the association wants.”