'Tsunami Of Unjust Taxes': Hospitality Industry Warns Of Collapse In Maharashtra

The Indian Hotel and Restaurant Association (AHAR) has raised a red flag over a series of tax hikes in Maharashtra, warning that the state's hospitality sector is on the verge of collapse.

In a strongly worded statement, AHAR described the successive levies as a "tsunami of unjust taxes" that are threatening jobs, business survival, and the long-term viability of the industry.

According to the association, the burden on the sector has grown sharply over the past year: the VAT on liquor was doubled from 5% to 10%, followed by a 15% increase in license fees for the financial year 2025–26. Most recently, a 60% hike in excise duty has added to the financial strain.

“These hikes are nothing short of a death blow to an industry still reeling from the aftershocks of the Covid-19 pandemic,” said AHAR President Sudhakar Shetty.

Maharashtra is home to over 19,000 licensed bars and permit rooms, growing at 8% annually. The industry directly employs about 4 lakh people, supports 48,000 vendors, and an estimated 18 lakh dependents, the hoteliers' body said in a release.

AHAR warned that such steep tax increases could lead to rising tax evasion and cross-border liquor smuggling. It also expressed concern over reduced affordability for consumers, lower demand, and a broader economic downturn for the sector.

The association said the tax policy runs counter to the government’s efforts to promote Mumbai as a global tourist destination. “If these levies continue unchecked, Maharashtra could see a fall in tourist footfalls, a slowdown in business activity, and a dip in state revenues,” the statement added.

AHAR has urged the state government to roll back the recent tax hikes and initiate dialogue with industry stakeholders before it’s too late.