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Maharashtra: Hotels say excise hike spells doom for crisis-hit industry

MUMBAI: The government’s decision to increase annual excise licence fee by up to 70% has shaken hotel, restaurant and liquor shop owners. The hospitality industry has borne the brunt of tough decisions in recent years, be it the GST rollout, lockdowns, early closure timings, and a precondition for fully vaccinated staff even before vaccines were adequately available. The notification announcing a 15% rise in licence fee for liquor-serving restaurants and hotels, and 70% increase for liquor shops is another nail in the coffin.

Many will stop serving liquor altogether or down shutters. AHAR ( ) president , who owns Hariyali Fine Dine and Bar, said bar owners are not in a position to relay the increase to patrons. “Already footfalls are low due to Covid restrictions. Spending power has decreased too,” he said. This is a dire situation because hotels will have to absorb a further hit on their income — or shut down, as 30% have. “The unprecedented crisis has seen restaurateurs commit suicide, decades old staff migrate to hometown or switch occupations.

Working with restrictive timings and capacity, businesses which have barely been able to keep their nose above water are handed an excise increase. How can we survive in such an unconducive environment and provide livelihood? Unemployment leads to crime,” said Shivanand Shetty.

Liquor store owners say they are the government’s “favourite whipping boy”. One owner, , said, “This rise in excise is unbearable. We will have to approach the state government to reconsider the fee structure.” Bhavesh Patel, director of World of Wines in CR2 Mall, , said, “It is not feasible to pay such heavy licence fees as revenue is low.

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We can barely pay rental and property tax. Sales are divided between new licence holders — and now supermarkets will also stock liquor. Already margins are low as we invested in providing home delivery during the lockdown. ” Patel says government must mandatorily involve the hospitality industry while making decisions that impact ‘Ease of Doing Business’. An official of the Association of Progressive Retail Liquor Vendors said rise in fees from Rs 15 lakh to Rs 21 lakh was too harsh.

“We expect tax reforms that are businessfriendly and help government earn more revenue.” “We shall continue to engage with the state to seek relief and waivers in statutory fees. In 2019, 50 lakh employees were directly engaged in the industry, but now 50% have lost their jobs,” said HRAWI. The state expects extra revenue of Rs 300-350 crore from this rise in duty. An official seemed to suggest that the industry should count its blessings.

He said, “We gave them relief from licence fee for the last two years when they suffered losses amid the lockdown.” The state had rolled back a 15% hike and given 50% concession in licence fees for 2020-21. There was no raise in 2021-22. The official said in the third wave government was “careful to not shut down business completely”, and only regulated operating hours and occupancy unlike Delhi which shut restaurants.

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The above news was originally published on timesofindia

 

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