Mumbai hotels claim dip in home delivery orders because of GST

For a bill of Rs1,000, a customer is charged Rs180 extra as GST. Most feel the charges -- on a par with those sitting in AC hotels – are unfair.

The introduction of goods and services tax (GST) has led to an 80% drop in home delivery orders, claim hotel owners in Mumbai, who have passed on the increase in tax to the consumers despite a state government advisory not to do so.

AHAR wants the state government to convince the GST council, which reviews the taxes periodically, to reduce the GST to 12% for parcels and home delivery of food.(File)

Food parcel and home delivery account for 30% of their business, say hotel owners. While earlier 5% value added tax used to be levied, since July 1, customers have been paying GST even for home delivery orders. The GST for non-AC hotels is 12%, while for AC hotels is 18%. Of the 18% GST, the state and Centre get 9% each.

For a bill of Rs1,000, a customer is charged up to Rs180 as GST. Asked about the state government advisory asking them not to pass on the increase in the tax, which can be as much as 13 per cent, to customers, the hoteliers claimed they had no other option given the rise in input costs.

“The number of parcels and home deliveries has reduced by 80% as customers are not ready to pay GST,” claimed Adarsh Shetty, president, Indian Hotels and Restaurant Association (AHAR). “We are losing out on our business.”

Kamlesh Barot, director, Vie Hospitality, which runs the Revival Group of Hotels, said, “From 15-20 orders a day, we are now down to 5. In most cases, customers cancel the order on delivery seeing the GST. The whole preparation is wasted when that happens.”

AHAR wants the state government to convince the GST council, which reviews the taxes periodically, to reduce the GST to 12% for parcels and home delivery of food.