Kerala: Hoteliers blame GST for rise in prices

KOZHIKODE: When GST was announced, the public was happy because they estimated that meals at a restaurant would possibly become cheaper as the GST rate of twelve or eighteen per cent is lower than the current tax applied on food served in restaurants. But it has been noticed that many of the hotel owners in the district have hiked the price of dishes on their menu. The Kerala Hotel and Restaurant Association has disagreed with the statement of the public and also the finance minister Thomas Issac that hotel owners are charging higher rates citing the implementation of GST. The finance minister in his recent statement said that some of the hotels had hiked their costs and also urged the hotels to fix rates in accordance with the law.

Talking to DC, Kerala Hotels and Restaurants Association (KHRA) Kozhikode district secretary Mohammed Suhail said, “The allegations raised by some sections of society that we have hiked menu prices are baseless. Adding to the confusion of the public about GST, the finance minister’s observation in the context of GST that we are hiking the price of dishes has also created a lot of trouble. It is a baseless observation that GST would lead to reduction in prices of several commodities and therefore hotels and restaurants need not to levy GST.” He added, “It has been two days since the implementation of GST, but prices of commodities are increasing and not coming down. In this condition how can the public and Government urge us not to hike prices or urge us to bring down prices.”

“Even before the implementation of GST, the rates levied by certain hotel owners are higher”, said Nandakishore K, a city resident. Going to a hotel these days has become tough for a middle class family due to the increasing prices of food items. “In the name of GST, hotel owners must not exploit the public,” he added. As per the new system, air conditioned restaurants will attract tax of 18 per cent as against 10.6 per cent charged (including VAT and service tax) now.  For low-cost restaurants, the tax rate would be 12 per cent as against 6 per cent now. Non-AC restaurants will charge 12 per cent GST on the food bill. 5-star hotels will be even more expensive as the GST rate will be 28 per cent.