The Excise Policy for the year 2012-13,which was announced on Tuesday,will impact the hotel business by making drinking costlier. With drinks generating a vital part of hotels and restaurants income,a hike in the prices seems inevitable when the policy comes into force in May.
As per the excise policy which would be implemented on May 1,the fee for bar licences issued to restaurants,hotels and clubs would be increased by 13 per cent while the assessment fee for sales would be increased by around 10 per cent. Apart from this,the price of liquor would see a steep increase. All these factors together would lead to a substantial increase in the price of drinks served at hotels and restaurants.
Chandigarh Hospitality Association (CHA) General Secretary Ankit Gupta pointed out that the provisions in the Excise Policy would have an adverse impact on business. There is an across-the-board hike in excise duty and assessment fees. A culture of beer and wine drinking was developing in the city. The excise policy should have let that culture flourish. We are a beer market,with the demand being high for at least eight months. Some categories should have been spared a steep hike, he said.
Residents organising parties and functions at banquet halls in hotels too would have to shell out more. Recently,the Administration had imposed a luxury tax on banquets. Apart from this,hotels and restaurants charge a 12.5 per cent value added tax (VAT) and 3.09 per cent service tax.
Chandigarh Industrial and Tourism Development Corporation (CITDC) General Manager (Tourism) A K Malhotra admitted that the price structure of drinks at hotels would go up. But he quickly added that the clientele that comes to five-star hotels has deep pockets and a marginal increase would not make a difference. He said that it is at other places that some impact might be felt.
Contractors may try to
Amidst speculation that liquor contractors would hoard liquor to sell it at a higher price when the new Excise Policy comes into force,officials of the Excise and Taxation Department stated that contractors have a fixed quota that they can possess. Excessive liquor cannot be bought. The quota can be carried forward by two months. The contractors would then have to pay the difference in the excise duty.
City residents could be seen at liquor vends buying liquor in bulk. With the prices expected to increase between 30 to 40 per cent and in some cases even more,it is expected that in the coming days the sales would pick up. As has been the past practice,on the last few days of the current policy the prices at the vends are reduced to almost half. The last two to three days generally witness much rush at the vends.