GST Rates: Hotels may observe a day in protest

BENGALURU: Hotels and restaurants in Karnataka may observe a day's bandh ­ likely on May 30 ­ to protest the steep 12 per cent and 18 per cent GST rates for non-AC and AC restaurants respectively.

The executive committee of the Karnataka Pradesh Hotels and Restaurants Association is meeting in the city on Monday to take a call on the bandh, joint secretary Ravi Shastri told ET. The association is keen to go with its counterpart in Tamil Nadu, and decide on a common strike date. Shastri said they will also talk to Andhra and Telangana associations so that the hotel industry in the entire south can hold protests on a single day.

Prices of food items served at hotels, restaurants and fast food joints are expected to go up from July 1as the GST Council has decided on a tax rate of 12 per cent for non-AC hotels reporting a turnover of above Rs. 50 lakh, and 18 per cent rate for AC restaurants.

Veteran hotelier P Sadananda Maiya said input tax credits for hotels under the GST regime will be minimal as most of the items they use as inputs are exempt from tax. R Prabhakar, the man behind Darshini's, said the new rates will push up prices, and hurt middleand low-income consumers.