The Kerala Hotel and Restaurants Association alleged that several middlemen were misusing the GST situation to increase the price of raw materials used in restaurants, leading to the unprecedented increase in the price of food products in the State. Moideenkutty Haji, State president of the association, said that the bulk suppliers in Tamil Nadu had increased the price of raw materials suddenly after GST was implemented and the restaurants had no option but to increase their rates accordingly.
“The purchase tax of chicken, which was 14.5% was cancelled from July 1 onwards. But the price of chicken increased by ₹30 after GST was implemented”, Mr. Haji said, citing an example. “It is not just chicken, the situation is similar for vegetables and other raw materials. But the price of no other product has sky-rocketed like that of chicken”, he said.
The association has requested the help of the State government in controlling the price hike. But on the other hand, they are facing allegations from the public as well as the government that the restaurants had unjustly increased the price of food items, he said.
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However, a discussion with Finance minister T.M. Thomas Isaac on Wednesday ended without reaching any consensus. “The government wants us to reduce the prices considerably, which is not viable. We can reduce up to 2%”, Mr. Haji said, adding that the discussions would continue.
Meanwhile, the Consumer Protection Committee has alleged that hoteliers and restaurant owners were trying to misguide the public claiming that the GST had led to price hike of raw materials. The committee has warned of strong protest measures if the authorities did not control the situation effectively.