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8,000 city hotels to join strike against VAT regime

Written by: Staff

Mumbai, Apr 17 (UNI) About 8,000 hotels across the tate here will remain close on April 19 against Value Added Tax (VAT) regime.

President of Indian Hotel and Restaurant Association (AHAR) Chandrahas Shetty today told mediapersons here that the decision to implement 12.5 per cent VAT in addition to eight per cent direct tax on hotel revenue has had a disastrous effect on grade III hotels.

He said some of the immediate neigbouring states like Karanataka and Gujarat had four per cent tax, whereas Goa had only three per cent tax.

Mr Shetty said out of the 15,700 hotels across the city more than 80 per cent were grade III hotels which caters to common man with food and eatables like batawada, misal and milk products on a daily basis. Post VAT, several grade III hotels were forced to close down as cheap unhygenic food was regularly catered by roadside vendors and dhabas, he added.

However, Suprintendent of Licensing Bhaskar Golap said, ''These allegations are baseless as the BMC conducts regular checks and vendors are not allowed within 150 metres of railway stations and other private institutions.'' Abiding by the Supreme Court order, the civic body conducts daily raids on all unauthorised constructions and vendors across the city, he added.

Mr Shetty mentioned that negotiations with the state government had brought no relief as officals at secretary level were apathetic to the problems faced by them. New taxes on raw materials and increased resale tax on cold drinks and ice creams had transformed the situation from bad to worse, he said.

Association Tresurer Santosh Shetty said, ''I blame BMC as everything happening is within their knowledge and connivance.

These vendors are a serious threat in the post VAT scenerio as they are eating into the revenues of grade III hotels.

Highlighting the negative aspect of the tax system, Mr Santosh Shetty said taxes in five star hotels were reduced from 23 per cent to 12.5 per cent, whereas taxes were increased from 6 per cent to 12.5 per centfor regular hotels. As a result, the poor man's food is costelier in comparison to the rich, he added.

Defending AHAR'S decision, Mr Chandrahas Shetty said the association would submit a fresh petition requesting Chief Minister Vilasrao Deshmukh to intervene and address the concerns of the hotel industry. If the efforts fail, the association has decided to launch an indefinite strike affecting the entire state.


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