MUMBAI: The liquor served to you in a bar, lounge, club, discotheque or a cafe will get a little costlier. Maharashtra goverment has increased the VAT by 5% for permit room liquor service to make it to to total 10%. A GR to this effect was issued on Friday. However, there is no rise for liquor services in star hotels as already their VAT is at higher level, that is 20%.
Hoteliers say the increase of excise licenses fee recently by govt has already added the burden eventually making the liquor costlier for consumers. When states are competing to get maximum revenue and tourists, it will jolt our policy, they added. However, the rise will not affect over-the-counter sales at wineshops.
“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, bars will go up. We are in the age where states are competing with each realising the power of tourism in driving economies resulting in reduction of excise duties. Goa, Chandigarh and Haryana are few such examples,” said Pradeep Shetty, president of hotels and restaurants of western india (HRAWI) which has thousands of high end restaurants and hotels as its members.
Sukesh shetty, president of AHAR, an association of over 15000 premium hotels, bars and restaurants across MMR, said “The hike is not fair on restaurants as there is a clear discrimination on wineshop sales and on-the-premise-consumption. This will definitely affect the sales in our industry thereby directly affecting the employment, compared to retail sales. Restaurant industry employs 6 to 8 times more people per outlet than the retail industry,” said
Industry sources said the hike in VAT on liquor consumption inside the bars will lead to customers looking for cheaper alternatives like off premise consumption such as on building terraces, parks, beaches, parked vehicles or street corners which in turn may become a law and order challene for the state administration. It may be mentioned here that the state has recently proposed the permit rooms to allow them to keep the stock for retail sale of liquor bottles or over the counter sale which the sources in the industry said would, however, benefit the bars.

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