GST on hotels, restaurants to slash rates

 

 

Good news for foodies: GST ushers hotels, restaurants to slash rates by 5-10 percent

Eating out is going to get cheaper as hotels and restaurants in Pune have decided to reduce the price of food items by 5-10 percent; the prices had recently gone up after the Goods and Services Tax (GST) came into effect. Recently, the GST commissionerate held a meeting with Pune-based hoteliers and urged them to reduce their base prices as their input costs have reduced.

Both AC and non-AC hotels and restaurants in Pune had started charging more from July 1, in view of the 12 and 18 percent GST slabs applicable to them. Restaurant and hotel bills had increased as hoteliers had started to charge GST on their existing rates.

Ganesh Shetty, president of the Pune Hotelier’s Association, had said that, unlike other industries, the hospitality industry did not have the option to offset their taxes based on inputs. “Agricultural inputs do not attract GST so we thought that we could not avail the benefit of the tax offset,” he said.

Rajlakshmi Kadam, deputy commissioner of GST, Pune Zone, said, “During a recent meeting, hoteliers were asked to pass on the benefits they would be getting in view of the reduction in the prices of inputs”. She said that following multiple meetings with hoteliers, the latter have started offering a discount on their existing menu card.

Shetty said the hoteliers have decided to offer between 5-10 per cent discount after their meeting with GST officials, as well as Union minister Prakash Javadekar.

“Soon after GST came into effect, there was a lot of confusion about the tax. We had multiple discussions and have decided to provide the discount in anticipation of the reduction in input costs,” he said.

Around 70 per cent of the restaurants have already printed new menu cards, with the reduced prices, while the rest are in the process of doing so.

K N Shetty, manager of Hotel Roopali, said they have reduced their prices and are charging GST on the new price. “Post July 1, we were charging GST on the original prices and that had created some unpleasantness with the customers. Now, we have reduced the base prices and are charging GST on them,” he said.

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