Restaurants hit by state and Centre

BANGALORE: Bharati Muzumdar has to have the apple-and-citrus salad and the grilled Vietnamese basa fish when she visits Caperberry restaurant in Bangalore. But the Union budget has dampened her enthusiasm to try out gourmet specialties.
The budget has imposed a service tax on restaurants that will effectively mean a 3% increase on the total food bill."I am a fish person. So I may cut down on the dessert. The tax escalation is quite steep especially if you are eating out with your family," she said.
This increase comes on top of a steep increase in duties on liquor by the state government. So it’s not just food connoisseurs who are irked; those who love their drink too are likely to be upset. Arjun Sajnani, who runs Sunny’s restaurant, says the 3% rise on account of service tax is marginal; the additional excise duty on liquor by the state government will pinch customers more. "This could impact business," he says.
The Karnataka government’s recent budget imposed an additional excise duty of 10% on all forms of liquor, barring beer and wine.
"Customers are already burdened with a 13.5% VAT and a 7.5% service charge in our case. We already pay 200% duty on imported liquor. So why burden the customer with an additional 3% service tax?" asks Abhijit Saha, the owner of Caperberry and Fava.
Sajid Dhanani, MD of Sayaji Hotels, which own Barbeque Nation, believes the Union budget has spoilt the party for restaurants. "Eating out will become expensive. Restaurants may be forced to work on thin margins for the fear of losing customers," he said.