There is no rise for liquor services in star hotels.
(Representational Image/Shutterstock)
The rise in VAT rate will not affect over-the-counter sales at wine shops in Maharashtra
The liquor served in bars, lounges and cafes will soon get costlier in Maharashtra as the state government has decided to increase the VAT by 5 per cent for permit room liquor services from November 1. However, the rise in tax rate will not affect over-the-counter sales at wine shops.
According to the Times of India, a GR regarding this was issued on Friday. After this, the total VAT rate on permit room liquors will be a total of 10 per cent.
Notably, there will be no rise for liquor services in star hotels as they are already paying higher VAT. Currently, the VAT imposed on the liquor services at star hotels stands at 20 per cent.
Talking about the rise in the VAT rate, hoteliers told TOI that the increase in fee license fee recently by the government has already added to their burden as it made the liquor costlier for consumers.
“The increase is quite surprising as the same in the backdrop of the increase in the yearly excise fees will mean that prices in restaurants, and bars will go up. We are in an age where states are competing with each realising the power of tourism in driving economies resulting in a reduction of excise duties. Goa, Chandigarh and Haryana are a few such examples,” Pradeep Shetty, president of hotels and restaurants of western India (HRAWI) told TOI.
Some sources within the industry also told TOI that the decision to increase VAT is likely to drive customers toward more affordable alternatives like off-premise consumption, such as on building terraces, parks, beaches or parked vehicles.
The shift in the consumer pattern will not only result in loss of business for the bars and restaurants but also can pose serious challenges to law and order situations as well as drink and drive.
Apart from this, the government is also considering implementing a new excise policy that links pricing to the alcohol content of beverages and permits the sale of bottled liquors in bars and permit rooms, media reports suggested.
Source: News18