MP govt gives luxury tax break to hotels

To promote hospitality business, the state government has slashed luxury tax on heritage hotels for a period of seven years.

Further mandatory conditions of place, capital investment and minimum number of rooms to establish a heritage hotel have also been abolished.

"Now the luxury tax exemptions will be available for a period of seven years instead of five years," a government spokesperson said.

Heritage hotels in rural areas will get the exemption for a period of ten years with effect from April 1, 2006. Heritage hotels will have to pay zero luxury tax during the off season on rooms priced between Rs 501 and Rs 1,000.

At present heritage hotels charge 5 per cent luxury tax. For an room costing Rs 1,001, the tax will be levied at the rate of 10 per cent instead of 5 per cent.

Department of tourism will decide the off-season and the duration will not be more than three months.