Tourists travelling to Goa this year may feel the pinch as the Laxmikant Parsekar-led government proposed an increase in taxes on alcohol, travel and hotel bookings in the state budget, which comes into effect from August this year.
A luxury tax of 6 per cent has been levied on hotels quoting prices as low as Rs 751 for a night’s stay. The government claimed the additional tax levy was necessary as it reportedly found many establishments renting out rooms for less than Rs 1,000 through e-marketing, thereby causing loss to the exchequer. Similarly, the luxury tax on room tariffs exceeding Rs 3000 and Rs 5000 has been fixed at 9 per cent and 12 per cent respectively. However, the government has decided to slash the tax by 60 per cent during off season between June to September.
Alcohol is also set to cost more as the government is prepared to revise the excise duty on Indian Made Foreign Liquor (IMFL) and beers, that are imported or sold in the state. The tax could vary from Rs 20 to Rs 3,400 per bulk litre, which may directly reflect in retail pricing. In order to promote the local wine manufacturers, an import fee on bottled wine was increased from Rs 6 to Rs 10 per bulk litre. Subsequently, to promote small scale local distilleries the government proposed to exempt 5 per cent VAT on ‘Feni’ of cashew and palm variant.
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The government is also mulling the option of allowing retail liquor stores to operate beyond 9 pm by issuing special permits at a cost of 50 per cent of additional licence fee. The government would also allow possession of alcohol more than the prescribed limit, for a minimum payment of Rs 1,000 for personal consumption and Rs 2,000 for institutional purpose.
Flying out of Goa might become expensive with the proposed increase of Goa Value Added Tax from 12.5 to 18 per cent on Aviation Turbine Fuel (ATF) or jet fuel.
The government has also revised the Goa Entertainment Tax Act, enabling it to hike the entry fee to Casino’s from Rs 700 to Rs 1,000.
An addition fee of Rs 15,000 was proposed on vessels used for water sports and Rs 20,000 on those used for pleasure trips. In both cases the operators are likely to pass on the additional expense on the users.
While the government claimed that tourist footfall will double this year on account of major marketing and promotion initiatives, stakeholders in the tourism industry disagreed with the estimate.
“Increase of VAT on ATF and other additional surcharges are likely to hurt travellers interests as competing destinations for the state in South Asian countries have lower or no surcharges at all,” Raph De Souza, in a media statement said. According to the department of tourism in 2015, the state witnessed 52.97 lakh tourist footfall of which 47.46 lakh domestic tourist and 5.41 lakh were foreign travellers.
Liquor manufacturers on the other hand welcomed the state governments’ incentive for local producers.
“The financial impetus in the budget is overall beneficial for the local manufacturers, which otherwise faced stiff competition from imported brands, thereby hindering its growth and it capacity to provide employment in the state” Datta Prasad Naik, President of All Goa Liquor Sellers’ Association told the media.