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GST- Inflation Force To Shutdown Dozens Restaurant

After the arrival of the goods and services tax (GST), the hotel industry is facing too many challenges with small businessmen. For the hotel and restaurant industry, the past 12 months have been a lot of trouble. It is so difficult that their business has reached the level of 2015 and many hotels and restaurants have to shut down.

There are dozens of restaurants in the country who have decided to shut operations completely.

Unable to cope-up with increased manufacturing (production) cost and high rate of tax, a large number of small-scale restaurants have either stalled manufacturing for the season or started procuring finished products from big manufacturing brands.

Within the last 12 months, almost 50 famous dining restaurants and hamburger restaurants are closed in the country. The key reason for this is to take back the input tax credit from the hotel and restaurant, due to rising inflation and competitive environment, problems have arisen for these restaurant chains. Besides this, due to the opening of the store at the hyper-local level, the profits of these restaurants have also reduced.

Jubilant Food works, which operates the Domino’s Pizza and Dunkin Donuts Restaurant in India, has shut down 40% of Dunkin Donuts Stores. These restaurants were walking in loss. TGI Friday has also closed its three stores last month. US restaurant chain ‘Wendy also has closed many of its branches in the country. Similarly, JSM Hospitality has closed its California Pizza Kitchen and New Delhi’s Café Out of the Box.

There are many reasons for closing these restaurants and hotels. The main reason is the withdrawal of input tax credit under GST. Apart from this, due to rising inflation, it has become very difficult for the hotel and the restaurant to do its own business in the country. The ban on the sale of liquor at the banquets and highways also created difficulties for these restaurants and hotels. After this, their profits are continuously decreasing due to GST , their profits are continuously decreasing.

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