Restaurants down shutters against new service tax regime

In Pune,restaurant hubs Aundh,Fergusson College Road and Koregaon Park wore a deserted look with all restaurants and bars observing the strike.

Written by Express News Service | Published: April 30, 2013 1:12:19 am

Resturants across the city remained closed on Monday in protest against the new service tax regulations. The one-day protest,organised by the Pune Restaurants and Hotels Association (PRAHA),was part of the national-level agitation extending to cities like Mumbai,Ahmedabad and Coimbatore among others.

In Pune,restaurant hubs Aundh,Fergusson College Road and Koregaon Park wore a deserted look with all restaurants and bars observing the strike.

“The way service tax is collected is almost dictatorial. Restaurants all over the country are protesting tax regulations,” said Praful Chandanwarkar,managing director,Malaka Spice and Malaka Street.

Mir Saifee Shaikh,CEO,Peter’s Pan on Fergusson College Road,said,“The service tax has caused restaurants owners many problems and that is the reason we are protesting against it.”

PRAHA president Ganesh Shetty said the strike was organised in collaboration with federations from all over the country including Federation of Hotels and Restaurants in India (FHRI) and Western India Hoteliers Association.

Shetty,who owns Kalinga restaurant in Deccan,said that service tax was originally applicable for weddings and banquets. It was later levied on permit rooms and last year,air-conditioned restaurants with bars were included in the bracket.

On April 1,the new regulations also included restaurants with air-condition facility into the tax bracket.

“This is double taxation as there is VAT (Value Added Tax) already in place. This is against our constitutional rights,” said Shetty.

The association argument is that while they are willing to pay service tax,it should only be levied in amounts proportional to the air-conditioned area of a restaurant so that those who cannot afford the higher charges are not affected.

In all previous discussion with government officials,while their concerns were heard patiently,they were not offered any solution and were instead asked to collect the tax amount from customers.

Shetty said service tax has already affected their footfall because of the higher prices and they will have to hike prices by another 25 per cent if nothing is done about it.

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