GST: Hotels turn non-AC, suffer losses

GST: Hotels turn non-AC, suffer losses

Post-GST, air-conditioned eateries in the city are hit badly. Over 300 AC restaurants across the city have turned non-AC and more of them are jumping onto the cost-cutting band wagon. Customers are directly affected by the measure as they have settle for less comfort and pay more for facilities they don’t use at their favourite haunts.

Chandrashekhar Hebbar, President, Bruhat Bangalore Hotels Association (BBHA) told DH that BBHA office-bearers said they wanted 12% instead of the existing 18% imposition of GST for hotels with with AC facility.

“Restaurants offering air-conditioning have been included in the 18% slab. The 18% tax is applicable to the entire restaurant, including non AC section, which is unfair,” said Hebbar.  

The restaurants that don’t offer AC service to their customers, but have one AC in any corner attract 18% tax. Not just that, customers buying parcel food in AC restaurants also pay 18% tax.

“We are unable to cope up with the situation. Customers object the imposition of the tax. Why should they pay the tax when they haven’t used the service either while taking home parcels or using the non AC floor?” asked Hebbar.

According to the Association office-bearers, customers often argue, even fight and the restaurants lose business Hebbar added. “There have been attacks and vandalisation at restaurants over the tax issue. Some customers have been approached police seeking justice,” says Hebbar.

Vandalisation at restaurants have been reported Basaveshwaranagar, Basavanagudi, Malleshwaram and Jayanagar. Restaurants owners in Gandhinagar in particular have faced many problems. The west division police too confirmed such incidents.

As owners started imposing the tax, customers chose to stay off. “ We’ve incurred losses upto 30 % in the last three months, while close to 40 % customers have stopped visiting restaurants, he said.

Unable to find a way out as they were stuck between taxmen and customers, hoteliers met recently and decided to do away with the AC. They removed all types of ACs in their hotels. There are about 3,000 registered restaurants of all types, including bars and restaurants in the city.

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