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Hotel, restaurants body meets GST Council over tax rates

The association is seeking reduction of GST to 12% on all categories of restaurants from the differential rates of different segments

Illustration: Ajaya Mohanty
Illustration: Ajaya Mohanty

The Federation of Hotels & Restaurants Association of India today said the body met with GST Council members, including state finance ministers, to press for rationalisation of tax rates for the industry.

"We have met the GST Council, which was represented by the Union Revenue Secretary Hasmukh Adhia. We have also met a couple of state Finance Ministers separately and put forward our demands," Federation of Hotels & Restaurants Association of India (FHRAI) President Garish Oberoi told Press Trust of India.

The association is seeking reduction of GST to 12 per cent on all categories of restaurants from the differential rates of different segments, he added.

Currently, restaurants with no AC and no bar attract a GST of 12 per cent, while all other restaurants fall under the 18 per cent bracket.

"We also heard a news that GST Council was planning to remove the input credit system for the restaurants. This will hurt the industry and it will be against the basic principle of GST. It will also increase the prices. We requested not to remove it," Oberoi said.

"They have listened to us and almost agreed to it. They have assured us of a favourable outcome," he added.

Regarding the hotel segment, Oberoi said FHRAI demanded that the tax slab for the luxury category be brought down to 18 per cent.

"We are losing market to other neighbouring nations. Nobody wants to hold any big event in any big hotels in India. We are no longer a competitor internationally. Nowhere in the world, the tax is as high as 28 per cent.

"They patiently listened to us on this demand also and assured us of discussing it in the main meeting. They too felt it is very high at present," he added.

FHRAI put forward another demand of reclassifying the Integrated GST and allow the option to register a company at the place of business, Oberoi said.

"The officials, however, said it is as per the act. There is a flaw in the act actually. To rectify this, the act has to be amended. So this demand is unlikely to be met immediately," he added.

The GST Council is holding its two-day meet that began today in Guwahati.