Taxes turn party pooper

Published: 07 November, 2011 08:32 IST | Urvashi Seth |

State excise department officials report a 40 per cent dip in revenue from party licence fees; hoteliers blame additional taxes and soaring prices of alcohol

State excise department officials report a 40 per cent dip in revenue from party licence fees; hoteliers blame additional taxes and soaring prices of alcohol 

Mumbai -- the party capital of the country -- isn't partying any more. At least, that's what the figures from the excise department reveal. Officials from the excise department claim that there has been a 40 per cent drop in revenue collected through party licence fees since April.

No more an option: The additional taxes on liquor have made partying
at lounges and pubs heavy on the pocket of the common man. SoBo has
reported a drop in dos, hoteliers claim. Representation pic

According to the figures, the department usually collects Rs 10 lakh a month only in the form of party licence fees. However, since the taxation on liquor was imposed in April and the prices of alcohol has skyrocketed, the monthly income from licence fees has dipped to Rs 6 lakh.

Confirming the same, an senior excise official said, "We have spoken to various hoteliers and they too raised the same concern that an increasing amount of people are opting to throw parties at home rather than at hotels and pubs. Many also informed us that they have taken to outdoor catering, as they can't depend on the restaurant business anymore. Owing to this, we too, have felt an indirect impact, as our collections from party licences has taken a dip."

Partying at home
And even though, a recent survey revealed that city teens have taken to the bottle faster, the tippling habits are more restricted to the comfort of their homes rather than at pubs. Sanjeev Shekhar, general manager, Hotel Marine Plaza, said, "Taxes on liquor and food has impacted the business badly. "Since the government imposed a service tax on liquor and food, people prefer partying within the confines of their homes, as the cost of various licenses proves heavy on their pocket. Rise in cost of liquor by 50 per cent and taxes on liquor is one of the major reasons because of which parties in South Mumbai is fading out," grumbled Shekhar.

"Government is an active disabler. They are just imposing taxes on the industry and making business tough to handle. The impact of the same can now be felt on banqueting business," said Sudheer Behl, proprietor, Khyber Restaurant.

Kamlesh Barot, president, Hotel and Restaurant Association (Western India) further explained that at a recent meeting with various five-star hotel members similar concerns were raised.

"Parties in South Mumbai are dwindling by the day. The hotel industry is dying under the burden of the taxes and the transportation costs," griped Barot. The director of Revival Indian Thali, he also spoke of the new trend hitting the hotel industry.

"Now the cost to party has become so high, we have become flexible and allowing clients to get their own alcohol for parties. We don't want to lose business and we see this as a viable option."

Rs 8,300
Cost of acquiring a one-day party licence

Rs 10 lakh
The amount normally collected every month from party licences

Rs 6 lakh
The amount collected every month from party licences after the tax hike

Price rise
After the alcohol price hike that came into effect from April this year, regular brands are now 40 to 60 per cent costlier, while premium brands are 25 to 40 per cent costlier. The price of mild beer has also increased by 25 per cent.

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