HOTELS & RESTAURANTS WELCOME PROPOSAL FOR REDUCTION IN GST

Mumbai: The Hotel and Restaurant Association of Western India (HRAWI) has welcomed the Government’s proposal to reduce the GST rate from 18 per cent to 12 per cent, making it uniform for both the air-conditioned (AC) and non AC restaurants. The Association has also appealed to the Govt. to continue providing the Input Tax Credit (ITC) to hotels and restaurants which will help them maintain the prices for the food and beverages on the menu. HRAWI has stated that despite the cost of operations having actually gone up, hotels and restaurants are maintaining old prices on the menu in fear of losing customers.

“The move to bring down the GST rate for AC restaurants will definitely encourage the customer to eat out again. We welcome the proposal and thank the Government for considering our appeal. Presently all industries, and not just hotels and restaurants are trying to grapple with GST and the transitionary phase has been a very difficult phase for us. Continuing to provide ITC will help businesses to counter the rising prices onraw material and other utility costs,” says Mr. Dilip Datwani, President, HRAWI. “As of now, none of our vendors have reduced prices or passed on benefits of ITC to us. Additionally, post introduction of GST the costs of operations and raw materials have actually gone up. However many hotels and restaurants have continued offering F&B at the old prices but with the reduction in the GST rate, we will now be able to remain competitive,” he adds.

The hotel industry has also appealed that the GST rate on in-house restaurant bills be levied at 12 per cent like it would be for all other stand-alone restaurants.

“As major expenses like electricity, rent, salaries, vegetables, poultry, seafood are exempt from GST, the input credit advantage for restaurants is negligible. So, it is our humble request to the Government that they consider revising the GST rate for restaurants that are part of hotels to 12 percent in line with other stand-alone restaurants,” concludes Mr Datwani.

About Hotel & Restaurant Association Western India (HRAWI)

The Hotel and Restaurant Association (Western India) is a 67 years old Association of Hotels and Restaurants in Western India. Its members include smaller Hotels up to 5-Star Deluxe categories. The bulk of its members like any growth economy are made up of budget hotels. With membership base spread across Western India, HRAWI covers Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Goa and the Union Territories of Daman, Diu & Silvassa, and is considered to be the voice of the Hotel Industry. The association is part of the national body of Federation of the Hotels & Restaurants Associations of India (FHRAI), located in New Delhi, which was originally founded in Mumbai in 1950 by the late Mr J.R.D. Tata.

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