Despite GST cut, most hotels unlikely to roll back prices

  • Despite GST cut, most hotels unlikely to roll back prices

    Summary: While most of the fine dining restaurants kept the menu prices unchanged, but imposed GST as per the norms additional to the bill, smaller restaurants increased menu prices instead. This only means the benefit of the tax cut is unlikely to be passed on to the customers. It’s not that the GST rate cut has come in isolation. Hotels rarely increase their menu prices, and more often than not, when they do, it wouldn’t be for just one factor like GST. The best we expect from GST rate cut is regaining the old volumes.

    After the GST Council slashed tax rates for hotels from 12% and 18% to a uniform 5%, customers are yet to get clarity on whether hotels that hiked menu prices in July reportedly to “accommodate GST”, will roll them back. Such a rollback, however, is unlikely at most establishments, say industry insiders. This only means the benefit of the tax cut is unlikely to be passed on to the customers. While most of the fine dining restaurants kept the menu prices unchanged, but imposed GST as per the norms additional to the bill, smaller restaurants increased menu prices instead. “Hotels rarely increase their menu prices, and more often than not, when they do, it wouldn’t be for just one factor like GST , As Reported By Hindu.

    According to the Newspaper,Margins are fast decreasing in the business because of multiple factors like labour and real estate rent. So it is up to individual establishments to take a call based on their business scenarios,” said Vasudev Adiga, honorary president of Bruhat Bengaluru Hotels’ Association. They could not afford a rebate Two hoteliers who The Hindu spoke to said that their margins were hard-pressed already and they could not afford to reduce the recently increased menu rates. “It’s not that the GST rate cut has come in isolation. The Input Tax Credit that we were eligible for has been scrapped, which means that restaurants will have to absorb that cost.

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