MUMBAI: The Hotel and Restaurant Association (Western India) – HRAWI, has urged the Maharashtra Government to roll back the 5 per cent increase in Value Added Tax (VAT) on liquor served at bars and restaurants across the state.
On October 22, the Maharashtra Government had raised VAT for permit room liquor service by 5 pc, resulting in a new total rate of 10 per cent.
HRAWI requested this in a representation submitted to Chief Minister Eknath Shinde, Deputy CM Ajit Pawar, and Tourism Minister Girish Mahajan.
Expressing concern at the unexpected increase, HRAWI has stated that the hike in taxes will have an adverse effect on the hospitality industry, particularly on restaurants and bars and subsequently impact the tourism sector.
Tourism is a vital contributor to the country’s economy, accounting for approximately 9 pc of the GDP. “The affordability of liquor is crucial in the tourism sector. The increase in VAT in the state is in stark contradiction to this, and will adversely affect both domestic and international tourism. Affordability is key for tourists, and this decision hampers the initiatives taken to attract visitors,” said the hoteliers’ submission.