The hospitality industry in Maharashtra on Wednesday urged the government to withdraw its back-to-back hikes in Value Added Tax and liquor license fees. "On July 1, the state government hiked VAT on liquor to 10% from the current 5% followed by a 15% increase in license fees for the financial year 2025-26," Indian Hotel and Restaurant Association president Sudhakar Shetty told reporters.
He said the tax burden is not just an economic blow, but it is also 'a death blow to an industry that contributes significantly to employment and state taxes'.
"These draconian hikes are the final nail in the coffin. Our members are devastated and staring at a bleak future and our survival is at stake. We appeal to the government to engage with the industry and initiate urgent steps to roll back the tax hikes," Shetty added.
He said the hospitality industry in Maharashtra comprises over 19,000 legal permit rooms and lounge bars, with the number growing at an annual rate of 8%.
Highlighting the employment-generation capacity of the industry, Shetty claimed the industry provides overall indirect employment to 18 lakh people, including more than 4 lakh direct employees and supporting 48,000 vendors.
"Burdening such a large ecosystem with excessive taxation will have a cascading impact, not only on businesses but on employment, ancillary industries, and consumer sentiment as well. Tax evasion and corruption are bound to rise as liquor from neighbouring states will make its way into the state through illegal channels," he added.
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