Hotels and restaurants in Telangana would observe bandh on May 30 protesting the proposed increase in tax under the Goods and Services Tax (GST) regime and seeking the government to include them in the 5% tax slab.
The Telangana State Hotels’ Association president, S. Venkat Reddy, honorary secretary B. Jagadish Rao and others said at a press conference that 90% of the 40,000-odd hotels in Telangana fall under the 12% and 18% GST slab proposed by the Central government thus hitting the business badly.
They said families would stay away from restaurants owing to high tax structure and instead prefer the unregulated street food outlets.
“This will hit the earnings of the hotels in the organised sector and ultimately hit the revenue of the government. Moreover, 40 lakh employees dependent directly and indirectly on hotel industry will suffer.”
Bandh in other States
The bandh would be part of the bandh call given by the hoteliers in all other southern States – Andhra Pradesh, Tamil Nadu, Kerala, Karnataka and Pondicherry.
In the new GST regime, the Central government proposes to levy 5% tax on small restaurants with an annual turnover of less than ₹50 lakh, 12% tax on non-AC restaurants with an annual turnover of above ₹50 lakh and 18% on restaurants with air-conditioners.
Mr. Reddy said the GST was very low in several countries like Thailand (5%), UAE (5%), the United States (7.5%), Singapore (7%) and Japan (8%).
He said Indian restaurant industry was the 3rd largest service industry in India and three times bigger than the telecom industry while it generates 1.5 times more employment than IT-BPO sector. “Such an industry cannot be taxed heavily,” he said. He said the association members had represented to the Central government several times explaining their problems if the new GST was implemented and asking them to keep the industry in the 5% bracket, but to no avail.
