Bengaluru hotels seek GST relief amid rising costs

Bengaluru: The Bangalore Hotels’ Association has urged Union Finance Minister Nirmala Sitharaman to rationalise GST on hotel rooms and restaurant services, saying rising input costs are putting severe pressure on the hospitality sector.

The association proposed two options: retaining 5% GST on rooms and food services with input tax credit (ITC), similar to the benefit available for sweets and bakery items; or reducing GST from 18% to 5% on key expenses such as commercial LPG, building rent, and kitchen equipment, even without ITC.

"The sector employs lakhs of middle-class workers and supports farmers by sourcing vegetables, milk and fruits locally. We also provide free drinking water and restroom facilities to the public,” the association said in a letter dated May 4.

“We are among the largest employment generators for the middle class. Without ITC, our operating costs are skyrocketing,” said association president PC Rao.

“We support the farming community by procuring large volumes of perishables and provide free public amenities. It is time the tax structure reflects this social contribution,” he added.

Rao said LPG and rent account for nearly 40% of operating costs in the absence of GST relief. “A 5% rate would help us survive without passing the burden on to customers,” he said.