In a strong move towards fairness, the hospitality industry is raising its voice against the current GST framework that links restaurant taxes within hotels to room tariffs, putting hotel restaurants at an unfair competitive edge compared to standalone establishments. Spearheaded by the Hotel And Restaurant Association (Western India) – HRAWI, the sector is rallying for a significant change: a uniform GST rate for all restaurants, irrespective of their hotel association.

Pradeep Shetty, HRAWI's President, highlighted how the current GST model, which jumps from 5% to 18% for room tariffs above INR 7500, unpredictably impacts customers and places hotel restaurants in a tricky spot. This not only affects walk-in diners but also complicates banquet services, leading to a dwindling number of guests and a maze of operational hurdles.

Echoing the call for change, industry leaders like Siddharth Renganathan of Suvaii and Kabir Suri of Azure Hospitality Pvt Ltd stress the need for uniform GST rates to foster growth, encourage fair competition, and ensure the hospitality sector's resilience. They argue that the dining experience should be taxed equally, allowing customers to enjoy quality meals without the extra financial burden linked to arbitrary room rates.

This unified GST plea aims to rectify a system that has, since 2018, seen hoteliers voice concerns over declining restaurant footfalls due to customers preferring standalone restaurants for tax benefits. The industry's push for a standard 5% GST rate across all dining establishments reflects a collective effort to level the playing field, boost customer satisfaction, and keep pace with the flourishing standalone restaurant scene.

Moreover, the rise of external food delivery services eating into hotel dining profits underscores the urgent need for GST reform. Abhishek Sarwate of Utopian Smoothies points out the illogical relationship between room tariffs and dining bills for walk-in customers, advocating for a reevaluation of GST rate applicability to make dining experiences more equitable and logically priced.

The hospitality industry's call for uniform GST rates is a plea for fairness, aiming to dismantle the current tax disparity and ensure a competitive, sustainable, and equitable business environment for all dining establishments.