Restaurants affiliated to 52 unions across Maharashtra will strike on Thursday to protest the breakdown of talks on lowering of taxes imposed on them in April.
The unions, affiliated to the Federation of Hotel and Restaurant Associations of Maharashtra, want the state to halve the 8 per cent tax imposed on them to bring it in line with taxes in the neighbouring states of Goa and Karnataka.
"This is the last nail in our coffin," says Vasant Shetty, vice-president of Ahar, an association of around 6,500 restaurants in Mumbai, "As it is, we are being driven out of business by the unauthorised tea and snack vendors who pay neither the tax nor the rent nor water-charges to the government."
Shetty explains that levying 8 per cent tax in place of the 1 to 3 per cent that existed before April will make the small restaurants, uncompetitive.
"Our customers are people who walk in for tea or snack. If we pass on the tax onto the customers, they will simply go to the road-side vendor. After all, it's just a matter of having a tea or a vada-pav," he says.
Shetty points out that while the bigger restaurants, which were paying taxes as high as 23 per cent before the April changes, have definitely benefited, it is not they who have to compete against the non-taxed vendors.
"Earlier, the taxes used to start at 1 per cent and there were rates of 3 and 5 per cent for the medium restaurants, but now even the most 'third-class' restaurant have to pay 8 per cent, which is double the tax that restaurants are subjected to in neighbouring states like Goa and Karnataka," he adds.
The associations have been conducting talks with the state government for the reduction of the tax for the past six months, but to no avail.
They claim that they are "more than willing" to pay 4 per cent tax, but cannot afford to "lose more customers in the name of paying taxes."
While Thursday's strike has been termed a 'token' strike, Unions are yet to announce any concrete plans in case the State Government ignores it.
