Hotel and Restaurant Association demands duty cut

April 7th, 2008 - 7:44 pm ICT by admin  

Mumbai, April 7 (IANS) The Hotel and Restaurant Association (Western India) has demanded the Maharashtra state and central governments reduce value-added tax (VAT) and electricity duty. Association president Dinesh Khanna said: “We have requested the finance minister of Maharashtra to reduce VAT to four percent which is now 12.5 percent on food and beverage turnover.”

Khanna said HRA wants the rate in sync with neighbouring states like Gujarat, Madhya Pradesh, Chhattisgarh and Maharashtra.

At present, hotels and restaurants are levied an electricity duty at 13 percent, though hotel sector have been notified as an industry in 1999. “The industry loses over Rs.1 billion annually in Maharashtra due to electricity duty,” he said.

The association feels that the tourism sector has immense growth potential and the major hindrance the inbound tourist faces, besides the lack of infrastructure, is insufficient hotel rooms.

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