FHW Staff– Mumbai
In response to Maharashtra government’s proposal to increase the license fee of permit rooms and wine shops, the Hotel and Restaurant Association of Western India (HRAWI) in Maharashtra has filed a writ petition in the Bombay High Court opposing the proposed hike.
In February, the Maharashtra Government had proposed to hike the license fee of permit rooms and wine shops by as much as 50 per cent. This had come in for heavy criticism from the hospitality industry which had termed the proposal as regressive and a certain death knell for the hotel industry.
DS Advani, president, HRAWI, said, “Hotels in Maharashtra are one of the most taxed in the world. The industry cannot bear any more burdens. As it is, the hotels pay an aggregate of direct and indirect taxes to the tune of 38 per cent overall, compared to five to seven per cent taxes in countries like Japan and China. We have now reached the stretch point. If the proposed hike in fees comes into effect, many hotels will shut down. Hence, we’ve taken this step to protect the interests of the hotel industry and will hope for justice.”
HRAWI has informed all its hotel and restaurant members regarding the development and requested to await the outcome of the case before renewing their excise license. The hearing of the same is likely to come up before March 25, 2014.
Gurbaxish Singh Kohli, vice president, HRAWI, said, “As it is customers have been complaining of high costs. Any more increase and they will entirely stop visiting permit rooms. This does not mean that they will stop consuming alcohol; it will merely result in customers opting to drink at their houses or shifting to spurious liquor or country liquor. Consequently a lot of permit rooms will close down and employees will lose jobs, besides the gross tax collections will witness a drop.”
License fee for permit rooms is proposed to be increased from INR 366,000 to INR 544,000 and that for beer shops, from INR 95,000 to INR 150,000.
HRAWI has been engaging with the government at various levels to rationalise license fees and taxes. Kamlesh Barot, immediate past president, HRAWI, said, “The complacency that the Maharashtra state always gets into for such anti-tourism policies, is due its gateway privilege geographical position, that it ranks in the highest among all states of India on tourist arrivals. Very small stimulants to hoteliers will show a major effect due to sheer numbers in revenue maximisation, but the mindset on tourism with the government is missing, albeit at a cost of our hotel industry’s progress, an example being this hike in the excise fee.”