More than 200 hotels in Bengaluru City have reportedly removed AC facility. The decision was taken due to steep fall in the number of people visiting these AC hotels. All thanks to GST.
The medium scale hoteliers seem to be in trouble after implementing of GST in India. These hotels had AC but were not three, four or five-star hotels, so could not charge as much as the star hotels charge.
However, the new GST rule which increased the tax from 12 percent to 18 percent forced the hoteliers to increase the amount in the bill. Since then the number of people coming into these hotels dropped significantly.
With losses incurred over the months, the hotels have decided to remove ACs from the hotel, which will allow them to charge less taxes.
The owners hope that the business will pick up soon and they will make up with the losses made so far.
The rules became difficult to follow as even if one room in the hotel has AC, the bill of the entire hotel had to be charged under 18 percent tax. This was not a problem for three or hotels with more stars as they are known for charging exorbitantly for any dish and only those afford costly food go there.
But there are many hotels in the city which are spacious, clean and of good quality but are not as posh as the star hotels and its charges are affordable.
Such hotels have now removed AC and are charging 12 percent tax as they come under the non-AC slab in the GST now.