Budget tourists, those appearing for interviews in towns, traders from villages and students who go to universities for contact classes will be affected badly by the Centre’s decision to bring hotels offering rooms below ₹1,000 a day under the ambit of the GST.
Hoteliers said they were taken by surprise and had no inkling of what was in store at the last GST Council meeting.
A hotelier in Chidambaram said many students stayed in non-AC rooms that would cost ₹500 a day for 10-15 days at a time and with their small budgets, they would be hit hard by the decision. “Hotels cannot bear this increase and will have to pass it on to customers. At a time when everyone is recovering from the lockdown due to the pandemic, especially the hotel industry, this decision is very inappropriate,” he said.
There are at least 50 such lodges in Chidambaram cater for low-budget travellers.
Before the GST came into force, the State government had exempted such establishments from taxation. Tamil Nadu Hotels Association president M. Venkadasubbu said the exemption was initially ₹200 a day, then it went up to ₹300, then ₹500 and finally ₹1,000 a day. “The Association is planning to write to the Centre and the GST Council, expressing its concerns. We hope the GST Council will roll back its decision. There are thousands of patients and attendants who stay in such hotels. In Vellore, for instance, there are two streets full of such hotels where the poorest of the poor stay. These hotels would not get any benefit from input tax credit, too, so it is unfair to them,” he said.
Association secretary R. Srinivasan said an estimated 20,000 lodges, hotels and mansions in the State would be affected. Places such as Rameswaram, Madurai, Erode and Kanniyakumari would have hundreds of rooms used by low-budget travellers.
“Tourists belonging to the lower middle classes who visit temples along with families will be affected. There are places that have common bathrooms and restrooms and even lodges that offer mattresses and pillows for overnight stays. All these places will be brought under the ambit of the GST,” he said.
