Bengaluru hotel owners urge GST relief ahead of Union budget

Bengaluru Hotels Association urges FM Sitharaman to cut GST on rentals, online delivery charges, GEM portal fees, and ease EPF/ESI deduction rules

With the Union Budget set to be presented on February 1, the Bangalore Hotels Association has submitted a formal representation to Finance Minister Nirmala Sitharaman, urging key tax reforms to support the hospitality sector.

In a letter dated January 24, the association—representing hotels, restaurants, bakeries, sweet shops, and ice cream parlours—highlighted several financial and regulatory concerns affecting their sustainability and growth.

Among the top demands is a revision of Section 36(1)(va) of the Income-tax Act. The association argued that minor delays in depositing employees’ EPF/ESI contributions—despite being paid with interest before the income-tax return deadline—are unfairly disallowed as deductions. They requested retrospective amendments to ensure deductions are permitted if payments are made before the return filing date.

The letter also calls for reducing GST on hotel building rentals from 18% to 5%, citing the lack of input credit and the burden of reverse charge mechanism (RCM).

Another major concern is the levy of service charges on GST by online delivery platforms like Swiggy. Hotel owners argue that such charges inflate costs and should be removed.

Additionally, the association urged the government to cut service charges on the Government e-Marketplace (GEM) portal from 0.5% to 0.1%, making procurement more affordable for small businesses.

Also Read: Captaincy storm in Rajasthan Royals: Jadeja vs Parag as IPL Season 19 nears

These demands come amid rising operational costs and increased passenger footfall following schemes like Shakti Yojana. The hospitality sector, still recovering from pandemic-era losses, hopes the upcoming budget will offer relief and stimulate growth.

The letter was signed by association leaders P.C. Rao, Subramanya Holla S, and Veerendra N. Kamat, and also marked to the Finance Secretary.

Whether these recommendations find space in the budget remains to be seen—but the industry’s expectations are loud and clear.

Also Read: Bike taxi operations get green signal: Private transport bodies push for appeal against court order