Prompted by a decision in Gujarat, restaurateurs in Karnataka are asking the Yediyurappa government to waive property tax and electricity bills.
The Karnataka Pradesh Hotel and Restaurant Association met the chief minister on Wednesday with its demands.
“The Gujarat government has waived taxes and we are hoping our government learns from them,” says Madhukar M Shetty, general secretary.
Eateries have had a hard time dealing with the second wave, Shetty says. “They are allowed to work only from 6 to 10 am. And not all eateries are on online delivery apps,” he says.
On a 10,000 sq ft property, the property tax comes to about Rs 7 lakh a year, say business insiders.
“Most restaurants in Bengaluru are run on rented property. If the tax is waived, it will definitely benefit landlords as many restaurants have struggled to pay rent,” says Manu Chandra, Bengaluru chapter Head, National Restaurant Association India.
The industry hopes Karnataka will come forward with concessions and packages to help the hotel and restaurant business.
“Even small things like concessions on electricity bills and trading licence fees can help,” says Shetty.
High maintenance
Kiran Reddy, owner, Wanderers Microbrewery, Kalyan Nagar, says Bescom has already cut off the power supply at many restaurants.
“The government has been crude and cruel. They have not shown any concern for the hospitality industry even though we pay taxes,” he says.
Restaurants and microbreweries had appealed to the government during the first wave to waive taxes and fees, but the government has not been responsive, he says.
“Paying Rs 5 lakh to maintain a trade licence when business is absolutely dead is not easy. The government needs to understand and offer concessions,” says Reddy.
A taxman’s perspective
A senior official with the income tax department, says the state government has lost a lot after the introduction of GST. “The government’s main income is from the liquor business, land registration and stamp duty. They will not consider cutting down on any of these,” he says. The Central government retains control of funds earned by the states. “They pressure the states to pay for centre-sponsored schemes. The states lose flexibility in handling funds,” he says.
Out there...
The Gujarat government has waived property tax for hotels, restaurants, resorts and water parks for 2021-22.
No concessions likely
A top minister told Metrolife the Cabinet had not discussed any concessions for the sector.
He agrees the government has done little to help businesses such as hospitality.
“A good package would have helped many establishments stay afloat, but the government cannot help all sectors. We are concentrating on the health sector because of the pandemic,” he says.
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