"About 70 per cent of our 3,000 members have shut down their hotels and restaurants in protest against the new GST regime, in which we have been put under the 12 per cent and 18 per cent tax rates as against 4 per cent composition tax we pay currently," Bruhat Bengaluru Hotels' Association (BBHA) president Chandrasekhar Hebbar told reporters here.
Under the GST's four tax rate structure, non air-conditioned hotels have to pay 12 per cent while air-conditioned hotels will pay 18 per cent.
"The higher taxes will affect customers as well as our business. We will have no option but pass on a part of the hike burden to customers and absorb the rest of it," said Mr Hebbar.
The Association has estimated a Rs 10 crore loss due to the shut down from 6 a.m. to 11 p.m.
"We are not against the GST but the tax rate on us is very high. It will affect our sector badly," reiterated Mr Hebbar.
The BBHA members staged a demo at the Mysore Bank Circle in the city centre and submitted a memo to Union Revenue Secretary Hasmukh Adhia, who was in the city for a Town Hall meeting with traders and representatives of trade unions on the new indirect tax system.
About 25 per cent (2.5 million) of the 10 millon people here depend on hotels, restaurants and food joints for their daily food, they said.
In the absence of their regular eating places, thousands of people were forced to buy food from road-side eateries, bakeries, sweet shops and tea or coffee cafes.
Members of the Karnataka State Hotels Owners' Association, however, did not join the day-long shutdown.