More than 1.5 lakh restaurants will shut shop in Tamil Nadu on May 30, to protest against the new taxes under the Goods and Service Tax (GST).
According to the proposed GST tax, hotels and lodges which cost below Rs 1,000 a day will be exempted from GST. The hotels with a rate between Rs 1,000 to Rs 2,500, the tax will be 12% and hotels which charged Rs 2,500 to Rs 5,000 per day will have to pay 18% tax, reported The Economic Times.
Meanwhile, small restaurants with an annual turnover of less than Rs 50 lakh will be taxed at 5% and other non-air-conditioned restaurants will have to pay a tax of 12% and air-conditioned restaurants will have to pay a tax of 18%.
Moreover, hotels which charge more than Rs 5,000 a day will have to pay 28% tax and restaurants in such hotels, will also have to pay 28% tax.
Speaking to The News Minute, M Ravi, president of Tamil Nadu Hotel Association, said, â€śFood products like rice, milk and other food products are exempted from GST but after the food is prepared a tax of 18% will be charged, why should there be such a high tax? In the last ten years, there has been a tax of only 2% in Tamil Nadu. If a person is spending for Rs 100 per meal, he has to spend Rs 1,700 on GST per month. It is a burden for the public, we want the taxes to be 5% for food in all the restaurants and hotels.â€ť
He questioned why different food items are charged differently. â€śIce-cream and mineral water will be charged a GST of 28% and Indian sweets will be charged 5%. Why is there such a huge difference?" he asked.
Srinivasan, general secretary of Tamil Nadu Hotel Association said that they have more than 1.5 members in their association and all have promised to shut their restaurants and hotels on May 30.
A bank manager from Chennai, who often eats out, said, â€śNow, I will prefer to eat from roadside eatery shops than go to restaurants with such high taxes. But I feel people who regularly eat at big restaurants will continue to do the same. For them, 18% is not going to make a big difference. It is going to affect people who regularly eat from ordinary shops,â€ť he said.