Bengaluru, 2 May

The Karnataka State Hotels Association on Saturday urged the government to immediately reduce the GST on 19kg commercial LPG cylinders from 18 per cent to 5 per cent.

The demand has come in the wake of the price of commercial LPG being hiked by the steepest ever Rs 993 per 19-kg cylinder on Friday, marking the third straight monthly increase due to rising global energy prices linked to the West Asia conflict.

GK Shetty, President of the Association, in a statement, said the hike of Rs 1,308 in 60 days announced by the government (via oil marketing companies) is the sharpest increase in recent times.

Prices have risen from the roughly Rs 1,800 - Rs 2,000 range in March to Rs 3,100 plus now, he said, with the total increase ranging from 50 per cent to 70 per cent within 60 days, depending on the base city and timing.

"If immediate corrective measures are not taken, businesses will have no option but to pass on the increased costs to consumers, making eating out more expensive and affecting overall demand," he said.

Highlighting that the hotel and restaurant industry was facing an unprecedented crisis triggered by global disruptions, including the ongoing war, which has severely impacted supply chains, he further said, the shortage of commercial LPG, coupled with steep price increases, has significantly escalated operational costs for hotels and eateries across the state.

"The recent hike in commercial LPG prices will further intensify inflationary pressures," Shetty stated.

Noting that the hospitality sector, still recovering from the setbacks of recent years, is now grappling with multiple challenges, the association said, in addition to rising fuel costs, businesses are burdened with local levies such as garbage collection charges in Bengaluru and other regulatory expenses.

These cumulative pressures have already forced several small and medium establishments to shut down, while many others are struggling to sustain operations, it said.

The Association emphasised that reducing GST on commercial LPG is a critical step to contain the cascading effect of rising costs across the value chain.

Lower taxation would provide immediate relief to the industry, help stabilise prices, and protect both businesses and consumers from further financial strain, it said, urging the government to immediately reduce the GST on 19kg commercial LPG cylinders from 18 per cent to 5 per cent.

KSHA has called upon the state and central governments to act swiftly and decisively.

"The hospitality industry is a major contributor to employment and the economy. Supporting this sector during such challenging times is essential to ensure its survival and long-term sustainability," Shetty said.

The Association reiterated its commitment to working collaboratively with policymakers to find viable solutions but stressed that urgent intervention is necessary to prevent further closures and economic distress within the sector.