BENGALURU: Hoteliers seeking a reduction in the goods and service tax (GST) are pinning their hopes on the GST committee ’s June 11 meeting, as the one last Saturday did not bring them a reprieve.

“The GST council had to discuss certain concerns aired by people from various sectors at the last meeting. It may come up in the next one on Sunday. The council may look into the demand of reconsidering rates on different sectors, including the hotel industry,” said commercial tax commissioner Ritvik Ranjanam Pande.

Hoteliers from the southern states have come together to present their demand to the Centre. On Monday, representatives of hoteliers’ associations from Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, Telangana and Puducherry met BJP leaders, including party president Amit Shah, in New Delhi. They’d earlier held talks with finance minister Arun Jaitley and revenue secretary Hasmukh Adhia.

“Hoteliers from the southern states are united. We have decided to fight it out,” said P C Rao, treasurer of Karnataka Pradesh Hotel & Restaurants Association (KPHRA).

Under the new tax rules to be implemented from July 1, non-AC restaurants with an annual turnover of Rs 50 lakh will attract 12% GST and AC restaurants 18%.

The new rates are seen as particularly steep, especially in the south where the rates on the hotel industry were 5% or lower. In Karnataka, restaurants pay 5% tax, while in Tamil Nadu, Telangana and Andhra Pradesh it is 2%. In Kerala, the government levies only 0.5% tax on hotels.

“In most northern states, hotels are taxed at 14% and GST rates will not affect them much. Hotels in the south are in real distress with the steep hike in tax rates,” said B Chandrashekhar Hebbar, president of Bruhat Bengaluru Hotels Association.

They are demanding 5% GST on both air-conditioned and non-AC restaurants. On May 30, hoteliers in the south shuttered their restaurants to make their point. Rao said the hotels’ associations were planning for a bigger protest if their demands were not met. “We hope the GST council will be sympathetic to us. If that is not the case, we will plan a widespread agitation across south India,” said Rao.

A senior official from the Central Board of Excise and Customs said the GST council had taken note of the anomaly in tax rates between the north and south, and efforts were on to address the issue. “There is scope for rationalization of taxes. While the GST council is likely to consider the issue at its next meeting, the tax rates can be altered even after the GST rollout,” said the excise official.

