GST will make eating out even more expensive, warn hoteliers

MUMBAI: With the state government set to roll out the Goods and Service Tax (GST), for which it recently convened a special cabinet meet, hotel and restaurant owners

MUMBAI: With the state government set to roll out the Goods and Service Tax (GST), for which it recently convened a special cabinet meet, hotel and restaurant owners have warned the new tax will force customers to shell out more for their meals.

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They also claimed that at least 50 establishments shut shop every year and with the introduction of the GST, the number will only increase with each passing year as it is getting difficult to make profit.

The hoteliers have requested the state to look into the matter and offer relief.

At present non A/C hotels levy 12.5 % VAT on the total bills, while the ones with A/ C charge 17.5 % [VAT (12.5%) + Service Tax (5%)].

The Centre wants to introduce GST so that it can axe the existing multi-tax system and simplify business practices.

Members of the Indian Hotels and Restaurant Association (AHAR) claimed the GST will make the entire trade unviable.

“Patrons will cut down on eating out, as it will hurt their pockets. As it is business is down and further loss will only makes things worse,” said Adarsh Shetty, President, AHAR. He warned that unless the state provides some kind of relief, the situation will only worsen, thus forcing hoteliers to look at other options. Seconding Shetty’s opinion, owner of Shree Krishna Veg Heaven, Lalbaug, Naresh Shetty, said escalation of prices by hotels will hurt patrons. “It is ironic that businesses of those who supply hygienic food will suffer, while hawkers — who are hardly bothered about the quality — will flourish,” said Shetty.

Hotels and restaurant owners claimed that the existing tax regime has forced numerous age-old hotels to shut shop. In addition, shortage of labour has also made life difficult for them.