Several Liquor-serving restaurants in city decide to do away with air-conditioners to avoid paying additional 10 per cent service tax proposed in Union Budget
Several Liquor-serving restaurants in city decide to do away with air-conditioners to avoid paying additional 10 per cent service tax proposed in Union Budget
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| Fan club: To cool off this summer, you may have to make do with a fan instead of an air-conditioner as you down that beer at your watering hole. Restaurants also say they will focus more on open-air seating from now. Representation pic |
This summer, lounging at a restaurant with a pint of beer might not be as cool as in the past. After Union Finance Minister Pranab Mukherjee decided to impose an additional 10 per cent service tax on AC restaurants serving liquor, most restaurateurs feel they will not be able to bear the extra burden and have taken a joint decision to do away with air-conditioners.
Mohan Shetty, owner of Mirch Masala, a popular joint in Kothrud, said the only way to combat the additional tax proposed in the Union Budget was to do away with the AC in the restaurant.
"I have already decided that I will remove the AC because it will be an additional burden for us. The weather is pleasant in Pune and we mostly use the AC for three to four months and now we will have to pay the service tax throughout the year," Shetty said. "It does not make any sense."u00a0
An owner from a restaurant in Pimple Saudagar that has both a garden and an indoor area mentioned that he would now focus on the garden space.
"I will now utilise more of the garden space and might shut the enclosed area,"
said the restaurateur, who spoke on condition of anonymity. "It will make no sense keeping the indoor AC area open for the public and paying extra tax."
Most restaurant owners have decided to focus on the open spaces they have as the additional tax will also affect the balance sheet of the restaurants.
Nilesh Bhane, owner of Mezza 9 in Hinjewadi, said he will shut the inside restaurant area completely and will put his money on the garden space.
"How much can the customer pay? Patrons are already overburdened with taxes and now this (additional service tax) will hit them hard," he said.
Ganesh Shetty, president of the Pune Restaurant and Hoteliers Association and the owner of Kalinga restaurant off Karve Road, said they would now become directly accountable to the Centre.
"The Centre will investigate our accounts now and we will have to appoint a chartered accountant to manage our balance-sheet, which will be an additional expense," he said. "So, some of us so have decided to avoid this headache."
He added that a similar proposal more than a decade ago had met with the same response, but the climate of the city at that time allowed such a move. He said these days customers wanted ACs in enclosed seating areas as summers in the city had become hotter.
"Fourteen years ago the government had passed a similar clause in the Budget and at that time around 80 per cent restaurants had removed their air-conditioners," he said. "But the weather in Pune has changed now and this time customers are going to complain after we take such a step."
