One month after GST rates are slashed, eatery owners say losses were halved

Last month, the Central Government reduced the Goods and Service Tax (GST) rate to 5% from 18%.

A month after the Central Government reduced the Goods and Service Tax (GST) rate to 5% from 18%, hotels and restaurants across the city have witnessed a revival of their businesses.

People have started ordering food again as they feel that the current GST rates are fair (File pic for representation)

According to Indian Hotels and Restaurant Association (AHAR), the reduction has been a huge relief to the sector. Adarsh Shetty, President, AHAR, said that after the implementation of GST, the industry had seen a 30% increase in losses, which has now reduced to 15% over the last one month.

The GST was introduced on July 1, and the 18% tax rate for restaurants comprised 9% each of the state and Central tax. Since the burden of the tax was borne by the consumers, the restaurant businesses and food delivery systems took a hit.

Kamlesh Barot, Director, Vie Hospitality which runs the Revival Group of Hotels, also said that the parcels and home deliveries segment had improved in the last one month. “People have started ordering food again as they feel that the current GST rates are fair,” he said.

Even patrons say that it was a good decision to cut the GST. “Taxes should be levied but they should not be exorbitant. We have resumed ordering food from restaurants, a habit we had tried to limit,” said Anupam Shukla, an event management consultant who lives in Lokhandwala.

The hotel and restaurant business has been under pressure for the last few years due to a host of reasons like multiple taxes and labour issues.