Hotel and Restaurant Players Say GST Aggravated Economic Slowdown

Source: Google

Hotel and Restaurant Players Say GST Aggravated Economic Slowdown

According to industry leaders, business is down by about 15%. While the restaurant segment may not have been impacted much, hotels, outdoor catering services, and even bakers are complaining of a downturn.

It is for the first time that eateries have been brought into the tax net. They suffered a severe setback in the immediate aftermath of the rollout of GST but are now on their way to recovery. Multiple rates of taxation in residential hotels and taxes on items of daily consumption have aggravated the slowdown, claim players.

In the bakery segment, most items are subject to 18% GST except for toast and pizza bases, on which 5% GST is levied. Bakers say that 18% tax on goods of mass consumption, especially by people from lower and middle-income groups, has not gone down well with end consumers. A costlier product has directly hit sales, they say.

The Gujarat Bakery Association president, Mohammadbhai, said that rise in taxation has resulted in a 20-25% drop in business.

Sanat Relia, president of The Southern Gujarat Hotel and Restaurant Association said that the sector is suffering from a severe slowdown and it is high time that corrective measures are taken to revive business or else things would get difficult.

Overall business is down by about 15%. Outdoor catering is under the tax net, increasing the burden on the consumer. This has reduced deals too. Narendra Somani, president, Hotel and Restaurant Association.

As the tax was new, there was lots of confusion among the player in the first three months after the rollout. Then the business dived to about 30%. However, things have been reviving since then been reviving but still, there is a shortfall of about 10% compared to the previous year. Kunal Thakkar, Partner, Das Khaman.



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