The Hotel And Restaurant Association (Western India) (HRAWI) has submitted a representation to chief minister Eknath Shinde Minister requesting rollback of the recently-announced five per cent increase in VAT on liquor served at bars and restaurants. The association said the hike will have adverse effects on the hospitality and the tourism industries. The Association warned that the hike could result in bootlegging in liquor and a fall in revenue to the government and a fall in business for the hotel industry.
“Tourism is a vital contributor to the country's economy, accounting for approximately nine per cent of the GDP and employing over 12 per cent of the workforce. The affordability of liquor is crucial in the tourism sector. Many States, including Goa, Haryana and Chandigarh, recognizing this fact, have reduced duties or levies on liquor to drive sales and boost tourism. The increase in VAT in our state is in stark contrast to this," association president Pradeep Shetty observed.
In the post-pandemic times, domestic travel has surged, making reasonable liquor prices essential to attract customers. ``HRAWI has stated that lower prices not only increase state revenues but also encourage domestic travellers to choose Maharashtra as a travel destination. It has pointed out that higher prices will inevitably lead to a decline in business for restaurants," Shetty added.
“This is the second increase in prices, the earlier one being on account of an increase in excise license fees by 10 per cent. An increase in yearly excise fees followed by the doubling of VAT on liquor is likely to have a negative effect on businesses. On the other hand, reasonable liquor prices encourage spending, boost revenues and enhance the overall appeal of our state as a tourism destination. The hospitality industry is just about recovering from the pandemic's blow. Further price hikes will dampen the spirit of business owners," he warned.
