Hotels and restaurants in the district downed shutters on Monday heeding to a nationwide strike call given by the Federation of Hotels and Restaurants Associations of India protesting the levy of service tax in the Union Budget 2013-14 on all air-conditioned restaurants.
The response for the strike was total not only in Tiruchi district but also in Thanjavur, Pudukottai, and Nagapattinam districts falling under the Tiruchi region, S. Sundaresan, secretary, Tiruchi District Hotel Owners Association, here said.
The hotel owners are against the imposition of 12.36 per cent service tax on all air-conditioned restaurants including those that do not serve liquor. Further, they are also against the levy of service tax on restaurants that are even partly air-conditioned.
The move would only ultimately affect the customers as they would have to shell out more from their pocket even if they ate in partly air-conditioned restaurants, those in the hospitality sector said. The move would also affect business in the long run, they say.
“Majority of the customers especially those in the lower and middle income groups prefer the non-AC section with only a handful opting for the AC section in many restaurants not only in Tiruchi but also elsewhere in the country. This being the case, the hotels which are partly air-conditioned would be forced to charge more even from the customers who do not dine in the AC section owing to levy of service tax, said a leading hotelier in the city.
The business loss owing to closure of hotels and restaurants in Tiruchi district was nearly Rs.2 crore, Mr. Sundaresan said.
About 1,000 hotels in Tiruchi district have downed shutters in deference to the protest call, he added.
Restaurants in some leading hotels in the city also remained closed with the hotel authorities making food arrangements only for the guests staying in their respective establishments. The restaurants were not opened for public, another hotelier said.