THE Punjab Hotel and Restaurant Association will be meeting Deputy Chief Minister Sukhbir Singh Badal on September 14 over the recent hike in luxury tax in the hospitality sector,which was recently increased from 4 percent to 8 percent and will now be collected from Rs 200 onwards. This tax was introduced by the deputy CM last year. Under the list of new taxes imposed by the state government,luxury tax also entered through a secret gate and now hotels,restaurants and marriage palace owners have been asked to start paying additional tax. Amarvir Singh,general secretary of the hotel and restaurant association said: Punjab is not a tourist place and the average occupancy of hotels is 32 percent and if the tax is increased,ultimately it will be passed on to the consumers. This will further increase inflation and result in a dip in hotel occupancy. We already pay house tax,commercial rates of electricity (though industrial rates has been demanded),14.3 per cent in VAT,income tax and much more. Out of the earning of Rs 100,we are already giving Rs 53.3 as tax. Manjit Nagpal,president of the association,said: As per the VAT rules,not more than 13 per cent,with surcharge tax it now stands at 14.3 per cent. In September 2011,Sukhbir had promised to reduce VAT to 4 per cent and instead of fulfilling his promise he has added more tax. More than 2,500 hotels and restaurants are in Punjab and it will yield crores of tax. The association members,however,stated that if the tax will be reasonable,voluntary compliance will be there and it will result in more collections.
