[1]Hotels and restaurants across Maharashtra and eight other states remained shut on Monday as a part of the nation-wide strike called by Hotels and restaurants association (AHAR) against the service tax levied during the recent budget by the government.
Several office goers and other patrons who depend on restaurants and hotels were affected as around 20,000 restaurants, bars and hotels in the city downed their shutters.
The associations of Gujarat, Tamil Nadu, Goa, Chhattishgarh, Daman and Kerala also supported the strike.
The real bone of contention according to these businessmen is that even the non-AC eateries and partly air-conditioned restaurants have to pay service tax as per the budget guidelines.
This tax affects the semi air-conditioned restaurants and hotels as they are also forced to charge the tax to customers sitting in a non-AC area. Patrons preferring air-conditioned comfort have been paying more than one-third the previous prices since implementation of the budget.
The new service tax was implemented from April 1 according to the new budget. Earlier, service tax was levied only on restaurants that were air-conditioned and had licence to serve liquor. However, the liquor mandate has now been removed and all air-conditioned restaurants will now be liable to service tax. Eateries like McDonalds, KFC, etc. that were earlier not under the service tax ambit, would now be liable to the tax. These restaurants and hotels have been charging customers an additional 12.63 per cent on the 40 per cent of the total bill as service tax that goes to the Central treasury. This is in addition to the 12.5 per cent VAT.
Through the protest, the associations hope to send the message that the current tax impositions need to be revised so that people can once again afford meals at restaurants. In a worst-case scenario, according to the association, eateries will permanently shut down.
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