Hoteliers in Maharashtra Thursday expressed their opposition to the proposed 50 percent hike in licence fees of permit rooms and wine shops, terming it "regressive and spelling certain death for the industry."
The state government proposed to hike licence fee for permit rooms from the existing Rs.366,000 to Rs.544,000 and for wine shops from the present Rs.95,000 to Rs.150,000.
"The hotels in Maharashtra are one of the most taxed in the world. The hospitality industry cannot bear any more burdens and we have reached the stretch point. If the proposed hike comes into effect, many hotels will shut down," said Hotel and Restaurant Association of Western India (HRAWI) president D.S. Advani.
Urging the state government to reverse the proposal, he pointed out that hotels already pay an aggregate of direct and indirect taxes to the tune of 38 percent, compared to 5-7 percent in countries like Japan and China.
HRAWI vice-president G.S. Kohli said that already customers have been complaining of high costs and any more increase in the costs will completely deter them from visiting permit rooms.
"This does not mean they will stop consuming alcohol. The customers would opt to drink at their homes or shift to spurious liquor or cheap country liquor," he contended.
Besides job losses in the permit rooms, many might shut shop and the gross tax collections would also drop, Kohli added.
Advani said that on one hand, the state government is attempting to promote tourism in the state by simplifying procedures for and on the other creating an arbitrary revenue structures like entertainment duty and "now the proposed steep hike in excise fees".
The 63-year old HRAWI has around 1,300 members in Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Goa and union territories of Daman and Diu and Silvassa, Dadra and Nagar Haveli.
Its prominent members include top five-star hotels like The Taj group, The Trident, Hyatt, JW Marriot, and Leela. HRAWI is a part of the Federation of Hotels & Restaurants Associations of India, which was founded in Mumbai in 1950 by J.R.D. Tata.
