While the government has already tabled the Himachal Pradesh tax on luxuries (in hotels and lodging houses) amendment bill 2013 in the assembly, hoteliers have opposed the move fearing lose of business.
The bill has included banquet halls, gardens, conference halls and marriage palaces in the tax bracket. While tax on luxuries at hotels and lodges in urban areas will go up, hotels in backward panchayats have been exempted from luxury tax for 10 years from the date of opening of the place.
Around 2,000 hotels are situated in Kullu district of which 800 are located in Manali alone. Many hoteliers fear once the new tariff kicks in, tourists would skip Himachal Pradesh for other destinations. During this season itself, the state lost lot of revenue as tourists cancelled bookings after the Uttarakhand disaster and the calamity at Kinnaur in June.
Manali Hotel Association president Anup Thakur said the tourism industry is already in a shambles and the government decision would further ruin business. "New tax would be passed on to the customers as rates of every facility being provided would automatically increase. Then who would come to Himachal Pradesh as states like Rajasthan and Jammu and Kashmir have no such tax," he said.
Thakur said hoteliers are already paying 10% luxury tax and 7.42% central tax. Hoteliers also said in absence of better facilities high-end tourists are not coming to Himachal Pradesh, while budget tourists don't like to pay extra money.
"Roads are in bad shape while air services are not available in Himachal Pradesh. Before levying taxes, the government should have provided better facilities. Decision to levy new taxes would prove disastrous for ailing hotel business," Thakur added.
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