The news that there has been an increase in tax under the Goods and Services Tax (GST) for restaurants has been doing the rounds.
The Tamil Nadu Hotels Association has called for a strike to protest this unfair increase on Tuesday, May 30th. Over 2 lakh standalone restaurants and those attached to hotels in the State will down shutters.
M. Venkadasubbu, president of the association says “We have been pleading with various ministers at the Centre to cap the tax at 5% since this will directly hurt the consumers. But since nobody is listening to us, restaurateurs in States including Puducherry, Kerala and Karnataka are thinking of joining in the all south India strike on that day,”
Association Secretary R. Srinivasan talks about how it will affect the restaurants and the quality of food. “We pay PF and ESI to employees. Now, this exorbitant increase in tax would mean a decrease in footfall and customers who cannot afford food in restaurants would go to street vendors. That will have a domino effect and many small eateries that have come into the tax ambit would shift to the unorganised sector and the quality of food will suffer,” he said.
Effect on the Masses
Even ice cream and soft drinks are being taxed at 28%. This will keep families away from restaurants.
“We are also asking that ethnic food, including idli, dosa and coffee. not be taxed at such high rates since it is consumed by the masses. International food chains can bear high rates of taxes,” Mr. Ravi, Former Association President added.
V.K. Subburaj, an executive committee member of the association, says many people who stay away from home and consume three meals a day in restaurants would be badly affected. “A person who eats for ₹300 a day would be paying ₹1,620 as tax per month, which is quite steep. He will have no option but to shell out the money as he has no time to cook at home,” Similarly, families that spend ₹1,000 on a meal during an outing will have to shell out an additional ₹180 as tax.