Services Tax

AC

Hospitality taxed

About 200 restaurants in city have got ACs removed from their establishmentsThe Goods and(GST) implemented by the Union Government has sent shivers down the spine of restaurants with air conditioners (ACs). After 18 per cent GST was imposed on air-conditioned restaurants, proprietors of such hotels are getting the ACs removed from their establishments to avoid hassles.The GST is imposed even on customers, who take away food from restaurants whereis installed. As the number of customers visiting such hotels plummeted, owners came up with this idea. About 200 restaurants, including SLV corner in Gandhi Bazar, Anna Kuteera in Malleswaram, Priyadarshini in Rajajinagar and Gokul Veg in Gandhi Bazaar have got their ACs removed and several others are following suit.“We were of the understanding that only customers who use the AC facility would have to pay 18 per cent GST.But after it became clear that any customer, even the ones that chose not to use the AC section, would have to incur the GST, we started losing customers. Apart from the losses, we are getting into arguements with the customers.So hoteliers have decided to remove ACs,” said BBMP Hotel Owners’ Association president Chandrashekhar Hebbar.He expressed regret that officials had not given them an ear. “Imposition of GST has affected the restaurant business. Our demand to reduce the GST to 12 per cent went unheard,” Hebbar said.The owner of a restaurant said that 75 per cent of the seats in AC rooms have fallen vacant due to 18 per cent tax. “It is okay to expect those who use the AC should have to pay extra.But it is unfair to ask customers who are taking food away to pay extra.So, we have removed ACs from our restaurant,” said Raghavendra Bhat, Manager, SLV, Gandhi Bazaar.* Since the GST regime was rolled out on July 1, a uniform GST rate of 18% is charged on takeaways and food served inn the non-AC area of a hotel or restaurant if any part of it has air conditioning facility* It provides for a levy of 12% on food bill in non-AC restaurants* Tax rate for 5-star hotels is 28%