Cut in GST rates brings cheer to hoteliers, wet grinder suppliers

Chennai: In the biggest overhaul of Goods and Services Tax (GST) regime, the announcement of the reduction of taxes on over 200 items provided huge relief to consumers and businesses in Tamil Nadu.

While hoteliers reported at least 40 per cent decrease in their sales after GST rollout, Coimbatore wet-grinder business was one of the worst hit with 70 per cent reduction in sales. The revised slab would come into effect from November 15.

Restaurants and eateries:   
Previously, the tax levied on air-conditioned restaurants was 18 per cent and non-AC restaurants, 12 per cent and petty eateries with an annual income of 20 to 75 lakh, 5 per cent. According to the revised slab, the consumers have to pay only 5 per cent GST, irrespective of the kind of restaurant they go.  

M. Ravi, Chennai Hotel Association president said, “We would have met the finance minister at least 15 times to reduce the tax as business was down by 40 per cent. The current slab of 5 per cent does not have Input Tax Credit (ITC).

Though we do not have the ITC benefit, public is most benefited by this revision which would in-turn boom our sales.”

As against the usual crowd of 150-200 people for breakfast, not more than 80 people would turn up, said hotel owners. 

“Idly, which is the cheapest item in the menu now costs '42 as opposed to the previous amount of '35. We anticipate more crown starting from Wednesday owing to price reduction,” said R. Sakthivel, branch manager of a famous eatery at T. Nagar. 

Wet Grinders (Coimbatore): 
M. Radhakrishnan, ex-president, Coimbatore Wet Grinders and Accessories Manufacturers Association said that GST has had an adverse impact on them as close to 1,000 families in Coimbatore were directly involved in the business and there are more than 400 manufacturers.

The cost of grinders increased by Rs 650 due to which the sales have completely stopped. Now, the tax, which is reduced on both the raw material and grinders is a sign of relief, he said. 

Departmental stores and super markets : 
With the lowering of tax on over 200 items of mass consumption, even the department owners and super markers heaved a sigh of relief. Shopkeepers said, with 28 per cent GST levied on the high-selling products including chewing gums, deodorant, detergents and washing power and refined sugar, the customers have limited their purchase.

“Currently, most of the items come under 18 per cent slab and that would mean an increase in the sales again. Initially, a customer would put some unwanted items or excess goods in his cart and the prices have had an effect. Though, there was no visible change in the number of customers, the bill amount came down by a huge margin and we had a lot of left over inventory,” said V. Praveen, manager of a super market in Nungambakkam.