Select hotel & restaurant shares gain on GST rate change

STOCK MARKET - Shares of hotels & restaurant companies rallied up to 16% on the BSE in intra-day trade in otherwise subdued market after the Goods and Services Tax (GST) Council decided to reduce the tax rate for all restaurants, barring those in luxury hotels, to 5%, without any input tax credit.

Restaurants in hotels with room tariff of Rs 7,500 and above per day will attract 18% GST with full input tax credit.

Among the individual stocks, Royal Orchid Hotels hit a 52-week high of Rs 156, up 16%, and Speciality Restaurants rallied 8% to Rs 127 on the BSE in intra-day trade.

Asian Hotels (West), Jindal Hotels, Advani Hotels, EIH Associate Hotels and Coffee Day Enterprises are among those trading 2% to 8% higher, as compared to 0.28% decline in the S&P BSE Sensex at 10:56 AM.

According to PTI report, the Hotel and Restaurant Association of Eastern India (HRAEI) said the GST Council's decision to cut tax rate for restaurants to 5% without input tax credit comes as a big relief for the industry.

"We are very happy with new GST slab announcement for restaurants. Our proposals were considered with due importance and this announcement is a big relief for the hospitality sector," HRAEI President Sudesh Poddar said in a release.