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Uttarakhand abolishes entertainment tax with immediate effect


The withdrawal is with immediate effect.

In a major boost to the hospitality sector in Uttarakhand, chief minister Harish Rawat announced the exemption all hotels and restaurants from paying entertainment tax with immediate effect.

Addressing hotels and restaurants association’s annual meeting at Mussoorie, chief minister Rawat said he had already instructed officials in the state tourism department to issue an order to the effect within the next two days.

“Although, this move will cause a huge revenue loss to the state, we are determined to provide adequate relief to the hotel industry to compensate it for financial losses it suffered after many hotels and restaurants built on the Char Dham yatra routes were swept away in the 2013 flash floods,” said Rawat.

A senior state government official said that with government is currently charging a flat rate of INR 50 as entertainment tax per room with a tariff ranging from INR 2,000-10,000 a day. Rooms with such high tariffs are equipped with three to five-star facilities. Such hotels are located in major cities and tourist destinations like Haridwar, Dehradun, Mussoorie, Nainital, Almora, Ranikhet, Kausani, Binsar and Munsyari.

As a result of the exemption, state government is likely to suffer a revenue loss of over Rs 13 crore a day, officials said. “This loss of revenue loss will cause a major setback to the hill state like Uttarakhand, especially after central government stopped funding its eight tourism-related projects and changed funding pattern from 90:10 to 50:50 in other centrally-sponsored schemes like MNREGA,” said a senior IAS official in the state tourism department.

Officials said the move is also being seen as part of attempts by state government to attract investment in the hospitality sector. “As promotion of hotel industry will help generate more business to the state in the long run, we are ready to tolerate the revenue loss of over INR 13 crore a day after withdrawing entertainment tax on the hotel industry,” said Rawat.

Members of Uttarakhand hotels and restaurant association and those connected with the hospitality sector have hailed the decision. “We appreciate CM Rawat’s gesture as it will give much needed boost to the entire hospitality sector in the state which suffered heavy losses after the 2013 flash floods in state,” said a hotelier in Dehradun.

Source: Times of India

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