With less than a month to go before the 4.94 per cent additional service tax on AC hotels comes into effect, city hoteliers want a rollback.
Of the 15,000 ‘non-star’ category hotels in the State, at least 75 per cent are airconditioned. There are 150 ‘star’ category hotels. Even partially airconditioned hotels will have to pay the new service tax from April 1.
“Airconditioning is now a must in any hotel. There are even small AC hotels that have just 10 seats. Already ‘non-star’ category hotels are being charged a 2 per cent value added tax (VAT) while ‘star’ category hotels pay 14.5 per cent as VAT. We serve the public. Why should there be double taxation? It is against the Constitution,” said Tamil Nadu Hotels Association secretary R. Srinivasan.
The Association, after a meeting in the city on Saturday, said the members would send a representation to the Central government to roll back service tax.
“If the tax comes into effect, there is no option but to pass on the burden to customers. Many hotels are already running at a loss. Customers today think twice before deciding to eat out as food prices too have gone up,” said M. Venkadasubbu, president of the Association.
“Hotels are also levied luxury tax by the State and Central governments. There are about 15 different kinds of surcharges and taxes,” said Mr. Srinivasan.
Hotels arrive at the price of the food they serve after taking into consideration the rent, raw material and labour costs, electricity charges, local taxes and fuel prices.
“We cannot pay these costs out of our pockets. The amount spent on diesel equals the electricity bill. Added to that is a 40 per cent cut on power consumption,” Mr. Venkadasubbu said.
