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Hotels in Karnataka are facing challenges in passing on the benefits of recent GST rate cuts due to high taxes on LPG cylinders and property rents. The Karnataka State Hotels Association has urged the government to lower GST on rent to help businesses remain competitive. While the GST Council reduced taxes on about 375 goods and services during Navaratri, operational costs like cooking gas and rental expenses remain high. Association president G K Shetty explained that without relief on these expenses, hotels cannot lower food or room prices for consumers.
The Karnataka State Hotels Association has highlighted that hotels are unable to pass on the benefits of the recent GST rate cuts to consumers due to unchanged taxes on LPG cylinders and property rentals. The association has requested the government to reduce GST on property rents, which could help hotels manage costs and remain competitive in the market. Advertisement
The GST Council, which includes representatives from the Centre and states, recently decided to lower tax rates on around 375 goods and services, effective from the first day of Navaratri. While this move is aimed at benefiting the general public, hoteliers explained that several key operational costs continue to remain high, limiting their ability to reduce prices.
G K Shetty, president of the Karnataka State Hotels Association, welcomed the reduction of GST on multiple items, saying it would benefit consumers. He noted that people are asking when hotel food and room tariffs will decrease. However, he explained that hoteliers cannot reduce prices at this time without some relief from the government.
Shetty pointed out that certain essential items like vegetables and meat have been under 0 per cent GST from the beginning, but cooking gas cylinders still attract an 18 per cent GST. He emphasized that this cost directly impacts hotel operations and makes it difficult to offer lower prices.
Additionally, many hotels and restaurants operate from rented buildings and continue to pay 18 per cent GST on the rent. Shetty stated that if GST on property rents were lowered to 5 per cent, hotels could pass on the benefits to consumers. With the current GST structure, he said it is not feasible to offer any price relief at present.
The association's statement reflects the challenges faced by hotels in balancing operational costs with competitive pricing. While the GST reductions on other goods and services are expected to help the public, the lack of reductions on key costs like LPG and rent prevents the benefits from reaching customers.
Source PTI
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