UT levies 4% luxury tax on weddings,parties

Weddings and parties in the city are set to get costlier,with the UT Administration notifying luxury tax from Wednesday onwards.

Written by Smriti Sharma Vasudeva | Chandigarh | Published: February 23, 2012 1:44:51 am

Weddings and parties in the city are set to get costlier,with the UT Administration notifying luxury tax from Wednesday onwards. Also,one will have to cough up the tax for taking rooms on rent in hotels as well.

From now on,for every party and wedding at a hotel or a banquet hall in the city,one has to shell out 4 per cent of the total cost as luxury tax — in addition to the existing service tax,sales tax and service charges.

In fact,the UT Excise and Taxation Department has now asked all the hotels,party halls and banquets to register with the department for the new tax.

Roughly calculating,a customer will now have to pay a minimum of 19.59 per cent of the bill additionally in taxes,including VAT (12.5%),service tax (3.09%) and luxury tax (4%).

The figure will increase to 24.74 per cent if one hires a room at the hotel as another 5.15 per cent service tax is levied. With several hotels and restaurants also charging 10 per cent of the total bill as service charge,the total taxes to be paid would then touch 34.74 per cent of the bill.

Arvinder Singh,president of the Hotels and Restaurants Association of Chandigarh,said: “Already the customer has to pay so many taxes. It is like the old lagaan system of the government which will definitely take a toll on the hospitality business.”

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