State Minister of Finance & Planning and Forests Sudhir Mungantiwar has written to the Union Finance Ministry in support of a proposal by the Indian Hotel and Restaurant Association (AHAR), Mumbai, to leave the 5% rate of Goods and Services Tax (GST) on restaurants unchanged. In a letter to Union Finance Minister Nirmala Sitharaman, Mr. Mungantiwar said he hoped the government would make a positive consideration towards small businesses. “Small restaurants are facing [a] challenge; the price-sensitive common man is the customer of these small restaurants and in view of this, [AHAR has] requested you to not increase GST on restaurants,” he said.
AHAR, representing over 8,000 hotels and restaurants in Mumbai, submitted its proposal to the ministry on Wednesday. Santosh Shetty, president of the association, said, “The common man will have to move to roadside stalls or informal sectors which will lead to loss of revenue for small businesses as well as the GST loss to the government.” The proposal was forwarded to Ms. Sitharaman on Thursday. Mr. Shetty said, “We are delighted to see the government supporting our proposal. We hope the ministry reverts with a positive response.” On the other hand, the National Restaurant Association of India (NRAI) has written to the Union Ministry of Finance to provide two GST rate options to restaurateurs, 5% without input tax credit and 12% with input tax credit. Rahul Singh, president of the NRAI, said, “Restaurant services in the organised sector are severely hit with the existing GST rate, and a new rate of 12% would address the concerns of approximately six lakh restaurants.”