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Industry associations jointly appeal to Maharashtra Government for rollback of 15% excise license fee hike

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The Hotel and Restaurant Association of Western India (HRAWI), the Indian Hotel and Restaurant Association (AHAR) and the National Restaurant Association of India (NRAI) have once again appealed to the Maharashtra Government to consider a rollback of the 15 per cent hike in the excise license fee for the year 2020-21. The associations have cited the latest notification issued by the Chhattisgarh State Government announcing a 25 per cent reduction in the annual license fees for the year 2020-21 being provided as a relief on account of disruption caused to businesses on account the nationwide lockdown. Other than Chhattisgarh, Goa, Madhya Pradesh and the Union Territories of Diu-Daman too have offered relief in the Excise License Fee in their States to reduce the burden on establishments during the lockdown, without any increase having been suggested earlier.

The three major F&B trade bodies had earlier written to the Maharashtra Government on April 15 appealing for a rollback on the Excise license fee increase. Among other recommendations, it also asked the State for a stimulus package for the distressed industry. However, the associations haven’t received any response on the plea yet.

“The cash-strapped hospitality sector is already reeling under the pressure of ensuring the well-being of its employees during the shutdown and somehow preventing the immediate specter of massive job losses in the sector by deploying all its resources towards human needs. The hospitality and tourism sector account for 12.75 per cent of employment, 5.56 per cent of it is direct and 7.19 per cent indirect. As we speak, the industry is staring at a potential job loss of around 38 million, which is 70 per cent of the total workforce. Amidst this looming doom, an increase in fees is just too harsh a decision to even comprehend. While other States are making efforts to alleviate the pain and burden of its businesses, Maharashtra has decided to go in the other direction.” said, Gurbaxish Singh Kohli, president, HRAWI.

With businesses closed, establishment owners are struggling to support their own families and those of their employees. Hospitality players have been voicing about expenses including property tax, electricity, maintenance, staff welfare and water bills which continue to be levied in a zero revenue environment.

“For our industry to survive and ensure the livelihood of the millions employed we need fiscal support from the State Government on multiple levels. A reduction of 15 per cent for payment of the annual bar license fees only if paid by 30th April is equivalent to penalizing a business for non-timely payment of a fee. This comes at a time when there is zero cash flow and the industry is only adhering to the order issued by the Government to stay closed. We humbly request that this penalty clause be removed and instead offer us a reduction in the fee as other States have done,” says Shivanand Shetty, president, AHAR.

“It is common knowledge that the revival of the Hospitality sector may take more than 6 to 8 months at the minimum. Under these circumstances, increase in fees will be impossible to bear, especially from the standpoint of business revival. In these times, it would be only fair and equitable for the fees to be rolled back and it is imperative that the same be charged pro-rata equal to the days that hotels or restaurants will be operational,” says Mr. Anurag Katriar, president, NRAI.

“Words alone will not save jobs or help the millions of people who are suffering. The Government has to go beyond words and take decisive steps to safeguard the millions of jobs and lives of those who are dependent on a thriving Hospitality sector which is now under threat as a result of the pandemic. Governments have to rethink taxation and employment policies related to hospitality and tourism and ensure revival of businesses. Governments have an opportunity to recognize the sector’s unique ability to not only provide employment but also to drive equality and inclusivity. Given the timely and right support, this sector could lead recovery efforts,” concludes Mr. Kohli.

In the letter addressed to the Chief Minister of Maharashtra Uddhav Thackeray, the HRAWI has appealed for:

  • Rollback of the 15 per cent hike in the license fee and a give a reduction of the fees in these times of dire stress for the industry.
  • Pro-rata reduction in license fees charged owing to lockdown and consequent dry days as a measure of support to the Hotel and Restaurant Industry.
  • Withdrawal of the latest circular dated 13.04.2020 as well as of expectation from Hotels and Restaurants to pay any fees under present situation whereby lockdown is extended.
  • Not to put conditions to the reliefs granted on deferment of renewal date of staff payments or otherwise.
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