Most restaurants and bakeries shut across the State

However, food joints were open in hill stations for benefit of tourists; restaurant owners fear decline in footfall due to the impact of proposed hike in service tax

May 31, 2017 12:31 am | Updated 12:31 am IST - Chennai

Many customers had to manage with food served in small eateries and fast food joints on Tuesday as most restaurants across the State remained shut in protest of against the proposed increase in tax under the Goods and Service Tax (GST).

Nearly two lakh restaurants and those attached to hotels across the State downed shutters, seeking a revision of the tax rates. However, in Chennai, Tiruchi and Coimbatore, the small eateries which were kept open made brisk business.

In tourist spots and hill stations, restaurants were open for the convenience of visitors.

Nearly 80% of the hotels were functioning in Kodaikanal and hoteliers said they operated the restaurants as tourists would otherwise be severely affected.

While most hotels were closed in places such as Tirunelveli, Madurai and Kancheepuram, several restaurants served food in tourist spots, including Rameswaram and Kanniyakumari. Restaurant owners in Salem raised concerns about the impact on proposed tax up to 28% on the hotel and tourism industry.

Hoteliers said that the Central government has proposed to levy minimum of 5% as tax for small restaurants with an annual turnover of less than ₹50 lakh, 12% for those with annual turnover of over ₹50 lakh and 18% for those with air conditioning facility.

Burden on customers

Pointing out that it would add burden to the customers, M. Venkadasubbu, president of Tamil Nadu Hotels Association, said: “A person who eats for ₹300 will have to pay ₹54 towards tax. This will affect footfall at hotels.”

Restaurants in neighbouring States, including Kerala, Telangana and Puducherry, downed shutters seeking a revision in levy of tax. On an average, hotels made a business of about ₹150 crore across the State daily, he added. In Chennai, the small eateries did good business. S. Shanmugam, who runs a roadside eatery in Anna Nagar, said that his joint had nearly 25% more customers as other hotels were shut.

Hoteliers in Kancheepuram and Tiruchi said that they may not be able to decrease the price unless the Centre lowers the GST rate. Guru Renganathan of Tiruchi Hotel Owners Association, said they would be forced to collect the increase in tax amount from the customers.

Noting that there were 750 hotels and restaurants and about 1,500 bakeries in Coimbatore, D. Sreenivasan, president of Coimbatore District Hoteliers Association, said any eatery with sales of just ₹13,000 a day would now come under the GST and cannot buy raw materials without proper bills.

The association will submit its demands at a meeting convened by Chief Minister with representatives of select sectors on June 2.

Members of the Chennai Hotels Association demanded that the Centre must cap the tax at 5% for food. M. Ravi, association president, said sweets are being taxed at 5% under GST and the rates for all food must be kept below 5%. “We plan to represent our demands to the Chief Minister in two days before the GST council meets again. If the demands are not met, we may have to go on a strike for 10 days at national level,” he added.

Traders stage protest

Meanwhile, traders attached to Tamil Nadu Vanigar Sangangalin Peramaippu staged demonstrations in various places, including Chennai and Salem, in protest of the GST rates. K. Mohan, State general secretary of the Peramaippu, complained that of the 589 essential commodities that were earlier exempted from tax, only 80 items are now exempted from GST. “The Centre must modify the norms and provide tax exemption to reduce the burden on customers,” he said.

( With inputs from

L. Srikrishna, K. Lakshmi, M. Soundariya Preetha, Syed Muthahar Saqaf, R. Rajaram and V. Venkatasubramanian)

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.