PUNE: The Union budget is still facing fiery reactions. The Pune Restaurant and Hoteliers Association has strongly protested the decision of Finance Minister Pranab Mukherjee to impose service tax on air conditioned restaurants that have the license to serve liquor. A letter has been written by the association to the finance minister urging him to move back the service tax.
President of the association, Ganesh Shetty, said, “People coming to hotels are already charged with VAT on their bills. Addition of the service tax will amount to double taxation for the customers.” “Moreover, the customers are already paying 25 percent VAT on liquor. This kind of tax will make alcohol consumption and eating out very expensive”, he added.
Shetty also said that the association represents almost 4,500 restaurants in Pune, and thousands of further restaurants all over the state. All these members are against the declaration made in the union budget.
“The hotel sector, already under the influence of inflation coupled with high prices of various ingredients, will be unable to take this extra burden. We will lose customers as the customer will prefer visiting road side joints instead”, mentioned Shetty.
The association’s letter says that in the year 1988-89, the restaurant business had objected to outlay taxes in the union budget on the basis that the service provided is already incorporated in the cost of the food. The same was withdrawn by the government.
The association has also requested the minister to take back the service tax in the attention of lakhs of persons working in the hotel industry and generating income in crores for the government.
- Anuja Bagaitkar
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