Bruhat Bangalore Hotels Association has appealed to the Union Government not to burden small hotels by levying more tax under the Goods and Service Tax (GST) system.
Under the GST system, both star hotels and small hotels will have to pay service tax at 12 per cent. The association does not want small hotels to be treated on par with star hotels and told to pay the same rate of tax.
On Friday, Association president Chandrashekar Hebbar B. said that there are over 60,000 restaurants in the State and 85% of them are paying composition tax at 4 per cent. “We are not passing this on to customers. Customers of these restaurants are from the middle and lower middle class who are dependant on us for their daily food. If GST is introduced, we will be compelled to pass the burden on to customers by increasing food prices. With the additional burden, consumers may opt for roadside eateries that are unlicensed, which will grow in number,” he said.
Mr. Hebbar said that the GST Council should ensure that common man is not burdened and also the survival of small hotels.
