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December 16, 2011
 
Hospitality Industry In Maharashtra Protests State Government's Entertainment Duty


http://www.hospitalitybizindia.com/detailNews.aspx?aid=12392&sid=1

16 December 2011

Maansi Sharm, Mumbai:


The hospitality industry in Maharashtra is in the process of requesting a rollback of the state government's Bombay Entertainment Duty (Amendment) Act, 2010. The Act was amended to include an entertainment tax of Rs one lakh per month on independent pubs, and a monthly tax of Rs two lakh on pubs of five star hotels that fall under the Brihanmumbai Municipal Corporation (BMC) jurisdiction. Similarly, independent pubs and pubs in five star hotels that lie outside BMC limits will be charged Rs 50,000 and Rs one lakh respectively.

All permit rooms and beer bars with live orchestra within the BMC limits are charged Rs 50,000 per month while all others not covered the corporation are charged Rs 25,000 per month. The industry fears that the increased prices as a result of this duty will affect business during the Christmas and New Year week.

Pradeep Shetty, Chairman – Legal Matter Sub-Committee, Hotel and Restaurant Association (Western India) (HRAWI) said, “We are extremely unhappy with the monthly duty. The government has been charging its share of revenue from all venues that served alcohol and played live music. With this rule, however, even venues that hold private functions serving alcohol will be treated as pubs. In addition, the definition of live music is still not clear. Under this new rule even a DJ or pipe music played loud could be considered live music and charged accordingly.”

The government also demands a 25 per cent share of all entry fees and sponsorship programmes across the state to be given to the government authorities. Speaking on the issue, Kamlesh Barot, President, Federation of Hotel and Restaurant Associations of India (FHRAI) revealed, “The 25 per cent share on entry fees has been in place for a while now and we have made our peace with it. However, venues being charged through the year for their events is not done. These locations will be made to pay the fee even during lean months. The authorities have simply tweaked the law and made it more of a moral policing of alcohol and entertainment venues. Such measures will only ruin the night life that Mumbai is known for.”

Shashikant Shetty, General Secretary, Indian Hotel and Restaurant Association (AHAR) opined, “As a result of this tax, venues will increase their prices and drive out business. This will only increase corruption, rather than revenue, as customers will be forced to party on the sly. We have appealed to the government but are yet to receive an answer.”

“We have petitioned the Revenue Minister, Tourism Minister, Chief Minister and have even met with the collector to fight these fees but to no avail. We began protesting it when musicians started turning away from India and are still trying to rid ourselves of it. Cancellations during the upcoming holidays are going to increase as a result of this. Such rules affect the public as well as the balance between the government and the hospitality industry,” added Barot.