Restaurants, Hotels Observe Bandh Against GST

As many as 40,000 non-star hotels and restaurants in Telangana pulled down their shutters on Tuesday in response to a bandh call given by the Southern States Hotels Association as a protest against "high" GST on the categories.

As part of the central government's move for a "one nation one tax" policy, GST will come into force from July 1. Non-AC restaurants with a annual turnover of less than Rs. 20 lakhs and rooms in hotels where tariff is less than Rs. 1,000 per day are exempt from GST, but non-AC restaurants will need to pay 12%, and other restaurants 18%. And rooms of Rs. 1,000 to Rs. 2,500 per day will be charged 12%, rooms of Rs. 2,500 to Rs. 5,000 per day will be charged 18%, and rooms of over Rs. 5,000 per day will be charged 28%.

Telangana State Hotels Association President Venkat Reddy opined that the new policy of levying tax on hotels and restaurants as per GST was bound to put a heavy burden on the sectors. Apart from middle class clientele being affected, there would also be an adverse effect on the tourism industry. Therefore he demanded that not only the taxes on hotels and restaurants be reduced, a feasible taxation policy for star and non-star hotels be formulated and implemented.

President of Hyderabad Hotels Association Ashok Reddy pointed out that hotel industry was playing a prominent role in boosting the tourism sector, but taxation under GST would cripple the industry. He hence wanted that the central government reconsider its policy in this regard as far as the hotel industry was concerned.

Vice President of Southern States Hotels Association Somaraju said that over two lakh staff and employees working in the hotel industry were taking part in the bandh.

Meanwhile, thousands of pilgrims and tourists on a visit to Telangana and Andhra Pradesh faced hardships on Tuesday due to lack of food, thanks to the closure of restaurants.

Pilgrims visiting various temples, and tourists to various tourist destinations were caught unawares due to the hotel industry observing a bandh.

While the rich and affluent could manage as the star hotels did not participate in the bandh, the middle class people were the quite affected.

However, the closure of the non-star hotels and restaurants came as a boon to the road-side eateries and food kiosks, which did brisk business by exploiting the situation and charging more than the usual prices for various items.

The closure of medical and drug stores too affected people who were in urgent need of medicines for minor ailments.