FHRAI urges govt to provide relief from price hike of LPG for hospitality industry

By: |
November 17, 2021 8:54 PM

The association urged that the tax rate charged on LPG supplied to standalone restaurants be reduced from the current 18% to 5 per cent.

LPG

The Federation of Hotel and Restaurant Associations of India (FHRAI) on Wednesday said it has submitted a representation to the government to provide immediate relief to the hospitality industry from the increase in the cost of liquefied petroleum gas (LPG).

The association, in the representation to Prime Minister Narendra Modi, urged that the tax rate charged on LPG supplied to standalone restaurants be reduced from the current 18 per cent to 5 per cent, FHRAI said in a statement.
It has stated that since standalone restaurants are not allowed to claim the input tax credit (ITC), this move will help reduce the cost burden on restaurants.

“The unprecedented increase in the cost of diesel has drastically raised the logistics tariff, which, in turn, has led to an abnormal hike in the prices of grains, pulses, edible oil and other essential commodities. “There has been an exponential increase in the cost of raw materials used in restaurants since the lockdown period,” FHRAI Vice-President Gurbaxish Singh Kohli said.

This cost escalation of roughly over 30 per cent is severely affecting restaurants that are trying to resume operations and stay afloat after a turbulent 20-month lockdown and closures, he stated. “Add to this is the steep hike in the LPG cylinders. Under these challenging circumstances, we request the government to reduce the tax rate on LPG at least for standalone restaurants from the current 18 per cent to 5 per cent.

“Since standalone restaurants cannot claim ITC, this move will help reduce the cost burden on the restaurants which in turn will ensure that it does not burn a hole in the consumer’s pockets,” Kohli added.

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