Goa govt proposes to rationalise luxury tax

GOA BUDGET IMPACT

The Goa government has brought cheers to the hospitality industry by proposing to rationalise the luxury tax and reduce the excise on beer.

On the hotel front, the government will also value added tax (VAT) rates for small restaurants catering to the industry.

Hotels whose tariff is less than Rs 200 per day will be exempted from payment of luxury tax. The government has outlined three tax slabs for those with tariffs above Rs 200.

Upto Rs 1000, 5 per cent tariff will be levied and for tariffs ranging from Rs 1001 to Rs 3000, 8 per cent of the tariff rate will be applicable and for those exceeding Rs 3000, the luxury tax will be 10 per cent of the tariff rate.

Whereas, hoteliers under timesharing agreement or package deal agreement are proposed to be charged 5 per cent tariff rate.

The procedure of registration and renewal of registration has been simplified. Hoteliers will have to file a declaration in the month of September or October every year stating the total number of rooms available for operation and their tariff rate and pay the registration or renewal fee before October end.

The renewal fee for any hotelier having upto 10 rooms will be Rs 1,000 per year, between 10-50 it will be Rs 4,000, Rs 7,500 for hotels exceeding 50 rooms, for above 100 rooms a fee of Rs 10,000 will charged.

"Those who are found operating without valid registration will attract stringent penalties," Chief Minister Pratapsingh Rane told the House. On the liquor front, the Chief Minister said, "The excise duty on beer will be brought down from Rs 9 per bulk litre to Rs 7 per bulk litre." In a changed scenario, beer will be available round the corner so to say, as provision stores too might be permitted to sell beer provided they pay a licence fee of Rs 15,000. Whereas, import pass fee on beer at the rate of Rs 10 per bulk litre would be imposed.

"This is to protect the interest of local industries and also to generate additional revenue," Rane said.

However, the state government has proposed to do away with the import pass fee of 50 paise per bulk litre on rectified spirit, which is imported for the purpose of re-distillation into extra neutral alcohol. Excise duty on and Indian Made Foreign Liquor (IMFL) will be increased from Rs 30 to Rs 32 per bulk litre.

The rate of tax on country liquor such as feni and urrak have been reduced from 20 per cent to 4 per cent and IMFL from 22 per cent to 20 per cent. Now, the rate on foreign liquor and beer will be at 20 per cent, at par with IMFL.

The state government has also proposed to exempt services such as casinos, water sports and boat cruises from luxury tax and make them taxable under entertainment tax, as part of the rationalising process. Operation of casinos will be shifted from the Home Department to the Commercial Tax Department.

Amending the composition scheme, the government has proposed to keep only the small restaurants serving food, tea, snacks and non-alcoholic beverages at 3 per cent composition rate. Restaurants serving liquor along with cooked food are proposed to be kept at 6 per cent.