Hotels, restaurants and food joints shut against GST rates in Bengaluru

Bengaluru : About 2,100 hotels, restaurants and food joints across the city shut down on Tuesday to protest against the higher rate proposed under the new Goods and Services Tax (GST) regime from July 1.

"About 70 percent of our 3,000 members have shut down their hotels and restaurants in protest against the new GST regime, in which we have been put under the 12 per cent and 18 per cent tax rates as against 4 per cent composition tax we pay currently," Bruhat Bengaluru Hotels' Association (BBHA) president Chandrasekhar Hebbar told reporters here.

Under the GST's four tax rate structure, non-air-conditioned hotels have to pay 12 per cent while air-conditioned hotels will pay 18 per cent. 

"The higher taxes will affect customers as well as our business. We will have no option but pass on a part of the hike burden to customers and absorb the rest of it," said Hebbar.

The Association has estimated a Rs 10 crore loss due to the shut down from 6 a.m. to 11 p.m.

"We are not against the GST but the tax rate on us is very high. It will affect our sector badly," reiterated Hebbar.

The BBHA members staged a demo at the Mysore Bank Circle in the city centre and submitted a memo to Union Revenue Secretary Hasmukh Adhia, who was in the city for a Town Hall meeting with traders and representatives of trade unions on the new indirect tax system.

About 25 percent (2.5 million) of the 10 million people here depend on hotels, restaurants and food joints for their daily food, they said.

In the absence of their regular eating places, thousands of people were forced to buy food from roadside eateries, bakeries, sweet shops and tea or coffee cafes.

Members of the Karnataka State Hotels Owners' Association, however, did not join the day-long shutdown.