Crowd at restaurants yet to feel GST heat

M Ravi, president, Chennai Hotels’ Association, said that many people are not aware of the GST slab for hotels. “Therefore, the state has been continuing to have its regular share of customers. However, we are expecting to see a drop by next weekend once the concept of the tax is better understood. As hotels fall under the 18 % tax bracket – with non airconditioned hotels in the 12 % bracket – the bills are proving to be very high. Many diners were worried after they saw the bills and started arguing with the owners of the hotels,” said the restaurateur. 

Citing an example, he said, “A family had come to book a party hall at 100 Feet Road. After they were informed of the bill amount, they created a scene, cancelled the booking and walked out.” D Sampath Kumar, Food & Beverage Manager, Savera Hotel, said that the numbers have remained the same, even after the GST roll out. “We have given a clear break-up of charges in the bill as the taxation is different for food, beverage and smokes. 

Many diners were happy that GST had reduced the overall tax by 2.5% for food and by 6% on beverages. However, the worrying part for us is the online ticketing 

for music and stand-up comedy shows we conduct. If we have a Rs 500 ticket, the tax on that is Rs 150. That is something which is difficult to subsidise further,” he said. 

Room bookings, however, were not much affected, added Sampath. “In general, the basic rooms got cheaper with GST while luxury rooms a little bit higher. But the taxation on conference and banquet halls has come down.” Nikhil Moturi, a city-based restaurateur, said that only time will tell what the real impact of GST on hospitality industry is. 

“We had a few people come up and ask us the percentage charged. The actual raise for a restaurant of my calibre is 10%. Earlier we were paying 8% in VAT and other taxes. Now, we are paying 18%. It depends on the restaurant,” he said, adding that back-end of the business has become a little more tedious. “We have asked all our vendors to become GST-compliant,” he said.