Some hoteliers in the city have welcomed the GST Council move on reducing rates in restaurants at five-star hotels and roof tariffs, while others have sought reduction for standalone restaurants too.
The council has reduced the GST rate on restaurants in five-star and luxury hotels from 28% to 18%, bringing it on par with standalone air-conditioned restaurants.
The other move was to increase the room tariff threshold over which the luxury rate of 28% will apply from ₹5,000 to ₹7,500.
T. Nataraajan, secretary, South India Hotels and Restaurants Association, said it was a positive step to help the industry recover.
The manager of a city hotel also said the move would be beneficial to the hospitality industry and the customers too.
In a statement on its website, the Federation of Hotel and Restaurant Associations of India (FHRAI) said, “It is expected that this measure will benefit a majority of our hotel members. FHRAI will continue tirelessly to espouse the cause of its members in future and will aim at securing 18% GST for all our hotel members.”
However, other hoteliers say that it is unfair to treat standalone air-conditioned restaurants on a par with luxury hotels, many of which have licences to serve liquor. They urged the Central government to reduce GST rates for other restaurants as well.
“Customers who were paying 2 % as tax now have to pay 12% in non-air-conditioned restaurants. Similarly, there is a hike in air-conditioned restaurants. Even the Tamil Nadu government had urged the Centre to reduce GST on food in restaurants,” said a hotelier.
Regional discrimination
Another hotelier said, “The GST Council has imposed 5% tax on badam, pista and cashews since these items are consumed mainly by north Indians. Whereas, south Indian items like idli and dosa attract a higher rate of tax,” he said.
