Maharashtra Hotels May Strike Over Tax Hikes

This comes after the VAT on liquor was raised to 10 per cent from 5 per cent in 2023, followed by a 15 per cent hike in licence fees for the financial year 2025'"2026 (FY26).Now, small hotel owners have to pay Rs 86,250 per month as licence fees to the state government, as per AHAR. 

Additionally, the hike in excise duty by 60 per cent has made it difficult for small to medium hotels and restaurants to sustain their businesses. 

"It's a humble request to the Maharashtra government, honourable chief minister and  honourable deputy CM, I request you to listen to us. All of Maharashtra is in agitation mode. Give us some relief in this (hike in tax). Otherwise, the next course of action is the token strike, which has not been declared yet," said Sudhakar Shetty, president, AHAR. 

"We appeal to the government to engage with the industry and initiate urgent steps to roll back the tax hikes."

AHAR, started by a group of hoteliers to safeguard their interests in 1979, has over 19,000 members in Maharashtra.

While the rise in VAT on liquor, licence fees, and excise duty does not affect large hotel and restaurant chains in the state, it becomes a major issue mostly for small-scale hotels and restaurants, which compete in a price-sensitive market, said two hotel executives on the condition of anonymity.

Many members of the association, especially restaurants with a 50 to 100 seat capacity, think that they might not be able to continue running their business in this environment. On the other hand, AHAR noted that these concerns might cause domestic and international tourists to go towards other states, resulting in a decline in footfalls, business activity, and ultimately lower state revenues. This comes at a time when the prime minister's office, in collaboration with the World Bank, discussed and laid out a vision to make Mumbai as the top tourist destination in India.