Say it will promote cheating
Say it will promote cheating
"Don't force us to cheat customers" is how hoteliers and tour operators in the city reacted to the Delhi government's decision to fix the threshold limit for luxury tax at Rs 1,000 per room per day from the previous Rs 500.
Paharganj is home to various economy hotels. file pic
Dissatisfied with the increase, the hotel owners claimed that it would have made much more sense if the government would have decided to levy the tax on actual rates.
"This is impractical. It will not work out. The government should levy tax on actual rates instead," said Rajendra Kumar, president of Federation of Hotel and Restaurants Association of India.
In Delhi, taxes are levied as per the printed rates offered by the hotels which they claim as per the facilities being provided by them.u00a0 It is a common practice to lure the tourists that hotel owners offer lower rates than printed on the pamphlets and quoted in other places. Then why they want the taxes on actual rates?
"Whenever we offer packages generally reduced rates are offered. Suppose a customer is being offered a room at Rs 6,000 which has a card rate of Rs 10,000. The customer will pay Rs 6,000 as rent but he will have to pay luxury tax on the card rate. Due to this, the customers think that we are cheating them," said Gaur Kanjhi Lal, a representative of Indian Association of Tour Operators.
"It is a common practice across the world, therefore, it is high time that the Delhi government should also adopt it," he said. In almost all other countries and in a number of states in India luxury tax is levied on the actual rate only.
In Rajasthan it is Rs 1200, while in Haryana it is Rs 2000 in Uttar Pradesh it's Rs 1000 per room per day, say tour operators.u00a0 "If the government doesn't pay heed to our demands the investors and tourists will shift to other NCR towns from Delhi," said Kumar.
In fact, tourism ministry, in its letter in April this year had also asked the city government to increase the threshold limit for luxury taxes to Rs 2,000 per room for the city, according to government sources. However, Delhi government instead lowered the taxes from 12.5 per cent for all the hotels to ten per cent.
But, it has now proposed to increase the threshold limit of luxury tax up to Rs 1,500. "Actually those hoteliers and guest house owners who do not repair their rooms, just for quoting lower rates will get benefited from it. Also consumers will also get good rooms on cheap rates in areas like Karol Bagh and south Delhi," said a senior Delhi government official.
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