Associations in the sector are planning to form a committee that will seek an audience with the Chief Minister, as the sudden and inexplicable increase in taxes and excise duty is severely affecting sales
Associations in the sector are planning to form a committee that will seek an audience with the Chief Minister, as the sudden and inexplicable increase in taxes and excise duty is severely affecting sales
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Wine shop and restaurant owners have decided to join forces in order to crusade against what they say is a sudden and unaccountable rise in taxation in the industry.
Their associations will collaborate to form a joint committee, members of which will present their arguments before Chief Minister Prithviraj Chavan.
Since the implementation of the new tax structure, sales have dipped drastically, complain restaurant owners
This initiative comes in the face of the escalation of taxation introduced in the sector by the government in the new financial year.
Speaking to MiD DAY, Sudhakar Shetty, president of the Indian Hotel and Restaurant Association (AHAR), said, "Mumbai is an international tourist centre and the financial hub of the country.
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The implementation of the new tax structure has brought down our sales and is having a deleterious impact on the entire hospitality sector."
"Sales have gone down and hotel revenues have experienced a setback," he said, adding that the delegation of associations would meet the CM to present their case soon.
Domino effect
In its budget for this financial year, the state government has increased the excise duty rather excessively, Shetty said.
"Though the duty has been levied on manufacturers, it is the consumers who are facing the major brunt.
However, manufacturers, distributors, and retailers-all other members of this extensive chain are reeling under these changes," he said.
"The government has unfairly levied a five per cent sales tax on liquor, in addition to the existing 10.3 per cent service taxe levied by the central government.
This has resulted in a drastic increment in pricing at restaurants and bars. Restaurants are losing business to street vendors.
Apart from this there has been an increase of 20 per cent taxation on cold drinks, which has inflated prices even further," he said.
"Maharashtra is a large state, flanked by several others, making it difficult to curb the entry of illegal liquor into its territory.
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This sudden increase in restaurant fares will soon encourage illegal trafficking of liquor. We fear that the new tax structure will fuel large-scale infiltration of duty-evaded stocks from neighboring states,"u00a0 Shetty added.
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