Appeals To Government to Extend Relevant Timely Permissions

Hotel Industry Gears Up Early For Christmas & New Year

Following a lackluster Christmas and New Year Celebrations last year, the hotel industry has decided to gear up well in advance to ensure that 2012 is not repeated. The previous year, the industry was besieged by a variety of factors that included a slow economy, higher levies and delays in Government permissions. By internal estimates, the hotels and restaurants on an average fell short of targets by as much as forty five percent.

“Christmas & New Year Eve functions are held annually. Yet there is no blanket sanction till the eve of the event day. The permission is given last minute, sometimes as late as 5 p.m. Our humble request is that there should be a permanent permission, amendable in an emergency situation so that the licensed establishments on payment of fees, could market their events well in time,” submits Mr. D.S. Advani, President, Hotel & Restaurant Association Western India (HRAWI) in a petition to the Chief Secretary, Maharashtra.

The petition further requests that the changes of the above timings be introduced in uniformity in all the Commissionerate areas of Maharashtra and in commonality with the Prohibition & Excise Department. The two departments, although wings of the Home Department, do not issue similar timings for operations.

“Last year, due to an arbitrary increase in entertainment duty, many five star hotels and stand alone restaurants did not hold special functions for New Year. The ambiguous clause of ‘loud music’ was explained as the reason for this increase. Apparently, celebrations don’t go without the involvement of music and levying additional duty for the same discouraged hotels from hosting celebrations. This led to a loss of revenue not only for the hoteliers, but also for the State Government. Lackluster New Years impact the overall spirit of the occasion. With each passing year we are losing our patrons to states like Goa and Karnataka that have more liberal and reasonable policies in this regard. Corrective steps need to be undertaken on a priority basis, else very soon we will have a crisis in our hands,” says Mr. Gurbaxish Singh Kohli, Vice President, HRAWI.

The amendment to the Bombay Entertainment Duty Act, 1923 has been one of the biggest grouses of the industry. The entertainment duty on live performances or live orchestra conducted in the Permit Rooms, Beer Bars, Pubs and all such places where liquor is served, with the amendment became Rs.50,000/- per month for Permit Rooms and Beer Bars with live Orchestra; Rs.1.00 Lac per month for Pubs situated at a place other than the 5-Star Hotels; and, Rs.2.50 Lacs per month for Pubs in 5-Star Hotels.

“The Entertainment duty (pursuant to the amendments three years back), are not only exorbitant, unreasonable and without any basis, but instead of promoting local art form in terms of live serenade musicians, this duty has caused massive unemployment of live musicians who were creating the right ambiance while guests partook their meal. The duty is so highly prohibitive in nature that for an average outlet's normal monthly sale of Rs. 10-15 lakhs approximately, the entertainment duty itself works out to Rs. 50,000 to Rs. 2.5 lakh per month. This leads to outlets shutting down the music amenity in their outlets and not only causes unemployment but neither creates any revenue for the State in the bargain,” says Mr. Kamlesh Barot, the immediate past President of HRAWI.

It may be noted that the Police Department is already charging Rs.15,000/- per month on live performances or orchestra in addition to Rs. 15,000/- per year to BMC by Permit Rooms, Beer Bars, Pubs etc.; Rs. 7,500/- per year to the Police Department as license charges; Rs. 1,80,000/- per year for Performance Licence; and Excise fees of Rs. 3,55,000/- per year.  The imposition of Entertainment Duty in addition to all these in effect amounts to double taxation of the same activity.

“If the Government does not step in, the New Year will be lackluster this year also. And this does not augur well for the industry in the State. Not only inbound tourists will give our State a miss, but residents from here will also go out to celebrate. We beseech the Government to adopt a rational policy,” concludes Mr. Barot.

About Hotel & Restaurant Association Western India (HRAWI)

The Hotel and Restaurant Association (Western India) is a 63 years old Association of Hotels and Restaurants in Western India. Its members include Hotels up to 5-Star Deluxe categories like The Taj, Trident, Hyatt, J.W. Marriott and The Leela who are some of the prominent members of our Association. With around 1300 members across Western India, HRAWI covers Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Goa and the Union Territories of Daman, Diu & Silvassa is considered to be the voice of the Hotel Industry. The association is part of the national body of Federation of the Hotels & Restaurants Associations of India (FHRAI), located in New Delhi, which was originally founded in Mumbai in 1950 by the late Mr. J.R.D. Tata.

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