CHENNAI: Licences of restaurants that continue to charge the increased prices as was done when the Goods and Services Tax (GST) rate was 12 or 18 per cent, will be cancelled, warned fisheries minister D Jayakumar on Wednesday.
Hotel associations claimed that business had dropped by at least 30 per cent after GST was rolled out on July 1.
On November 10, the Central government slashed the GST rate to five per cent, a move welcomed by several restaurateurs who lost significant business to the price hike. However, many continue to charge the same final price by hiking the menu value of food as they cannot claim input tax credit.
“There are 2.5 lakh restaurants in the State. The reduced tax rates will benefit all of them. However, if they do not pass on the benefit to the customer, we will take severe action and will cancel their licence if needed,” Jayakumar told the media.
He added that with the approval of the Centre a special committee with civil servants may be set up to monitor and prevent such over charging.
According to Tamil Nadu Hoteliers Association president Venkata Subbu, most restaurants have dropped their prices after the GST was brought down to 5%.