The South India Hotels and Restaurants Association has appealed to Union Finance Minister P.Chidambaram to scrap the service tax imposed on air-conditioned restau- rants.
Expressing disappointment over the imposition of 12.36 per cent service tax, the association members said the high amount of tax affected middle class the most.
A meeting of the executive committee of the association was held here on Saturday to discuss the issue, and leading hoteliers from Tamil Nadu, Andhra Pradesh, Karnataka, Kerala and Puducherry participated in it.
R.Rangachari, Association advisor, said the meeting passed a resolution to take up the issue with the Central government again since the nation-wide bandh observed on April 29 evoked good response. “At a time when we are appealing to accord infrastructure status to the hotel industry, the announcement on service tax came as a shock. Already, hotels are paying value-added tax to the State government,” he said.
Stating that hotels and restaurants should not be burdened further as they had been paying taxes for liquor permit and room rent tariff, Mr.Rangachari stated that the hotel business would become unviable if more taxes were imposed.
Meetings to be held in Vijayawada, Bangalore
“Our association has lined up a series of meetings at various places to see that the plea is heard by the Central and State governments. The next meeting will be held in Vijayawada this month-end and the annual general body meeting in Bangalore in September,” he added.
M.Chakravarthy, association treasurer, pointed out that air-conditioned hotels and restaurants had become commonplace as people look for AC facility everywhere. “Raw material costs have gone up and it has become tough to run restaurants. On what basis the service tax was imposed is not clear,” he said.
M.P.Purushothaman, association chairman, K.Murali Rao, vice-president, and K.Syama Raju, secretary, also spoke.
Issues related to hotels in southern districts were highlighted by P.C.M.Santhanam of Fortune Pandyan Hotels Group here, who is a member of the executive committee.