Goa Chief Minister Laxmikant Parsekar’s Budget for 2016-17, presented on Wednesday, has generally been viewed as one with an eye on the Assembly elections next year, but tourism is likely to be dearer with an increase in VAT on jet fuel, fees, and luxury tax on hotel rooms, among others, industry insiders apprehend.
The tourism sector claims it is the top industry in Goa after the demise of mining. Parsekar, who also holds the Finance portfolio, announced several populist schemes — financial subsidies, enhanced pension plans, new incentives, reimbursements, among others — but set aside only Rs 130 crore for tourism marketing, and
unspecified tourist infrastructure development, from the total budget layout of Rs 14,694.17 crore.
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For one, the Budget proposes to apply luxury tax of 6 per cent on hotels with tariff as low as Rs 751.
The government contends that it is necessary to bring such rooms under tax purview since it found many establishments are renting out rooms for less than Rs 1,000 through e-marketing to avoid tax of incidence, thereby causing losses to the exchequer.
Luxury tax on room tariff more than Rs 3,000 and Rs 5,000 have been fixed at 9 per cent and 12 per cent, respectively. The Budget, however, proposes to slash luxury tax by 60 per cent during the off-season from June to September.
Flying out of Goa is also likely to get dearer with the proposed increase of Goa Value-Added Tax on Aviation Turbine Fuel, or jet fuel, from the present 12.5 per cent to 18 per cent.
The Budget proposes to levy additional fee of Rs 15,000 on each water sports vessel, and an additional Rs 20,000 per vessel for those conducting pleasure trips on inland water.
By making necessary changes in Goa Entertainment Tax Act, the government also proposes to hike entry fee to casinos from Rs 700 to Rs 1,000.
The relatively cheaper alcohol in the state being a major draw for tourists, the news in the Budget is mixed for tipplers. Subject to parameters such as quantity, volume, and maximum retail price of alcohol, the government will revise excise duty on India-Made Foreign Liquor (IMFL) and beers that are imported or sold in the state. The tax for classified alcohol will vary from Rs 20 to Rs 3,400 per bulk liter, which may directly reflect the retail cost.
Liquor manufacturers have welcomed the governments’ incentive for local producers.