Restaurants in state shut for a day to protest service tax

“The service tax on AC restaurants was added in the last general budget by the central government but it was limited to the restaurants which serve liquor. But in this year’s budget,every single AC restaurant has been covered,” Gandhi said.

“This is illegal. If VAT is being levied,then a restaurant cannot be liable to pay additional service tax.”

Gandhi also said if the Centre did not withdraw the tax,the hoteliers would move the High Court.

About 800 restaurants in Ahmedabad city too joined in the shutdown. Restaurants inside three-star and five-star hotels were serving only hotel guests,claimed Gujarat State Hotel Federation chief Markand Desai.

In south Gujarat,over 400 hotels and restaurants remained shut. Representatives of Southern Gujarat Hotels and Restaurant Association (SGHARA) handed a memorandum to Commissioner of Central Excise in Surat,demanding that the central government withdraw the service tax.

SGHARA president Arun Shetty said,“Hotels and restaurant owners are already paying VAT (Value Added Tax) on food bills,luxury tax and service tax on rooms. Our national representatives met Finance Minister P Chidambaram,but were dissatisfied with the meeting.”