Goan Hospitality: Budget Extends Red Carpet

Meanwhile Liquor, Casinos Face The Music

ET&T Staff - Mumbai

Goa is showing why its hospitality is world-renowned. The state, in its latest budget released in mid-February, has improved upon its concessions to the hospitality industry. From the coming financial year, the Goa government intends to extend the off-peak period from six months to nine months, i.e, from March to November, along with a reduction of the off-peak period rate from four per cent to three per cent in respect of hotels falling under category ‘A’. In respect of category ‘B’ hotels, the applicable rates will enjoy a three per cent levy throughout the year.

Currently, luxury tax is being charged at slabs of five per cent and eight per cent based on the hotel’s classification. During the off-peak season, even these levies were reduced by 50 per cent of the basic rate.

While reducing the off-peak period taxes, the state government has increased the peak period slab from eight per cent to 10 per cent for the three month peak period, i.e., December to February. Making sure its good intentions are not abused, Goa’s chief minister, Manohar Parrikar, has made the application of sops conditional. "Only those hotels who are regular in paying the taxes can apply for the rationalised taxes," he said in his budget speech to the Goa state assembly.

Non-alcoholic beverages and cooked food too can benefit for Goa’s generosity. In their case, the government proposes to rationalise the categorisation of restaurants and the rate structure in a way that hotels with restaurants attached pay the same rate of sales tax as luxury tax.

However, liquor and casinos have faced the music. The state plans to levy a two per cent surcharge on the local liquor industry, while many levies on the gambling and casino segment have been doubled. "In continuation of my efforts to discourage gambling and to partially recover concessions given in luxury tax, I propose to increase various fees and deposits related to operation of gambling activities," said Parrikar in his budget speech.

The annual recurring fee for off-shore casinos is proposed to be increased from Rs 50 lakh to Rs 1 crore, while the application fee for installation of up to 20 electronic amusement/slot machines in five-star hotels and onboard off-shore vessels is proposed to be doubled from Rs 5 lakh to Rs 10 lakh. The other levies being increased are:

• The annual recurring fee from Rs 30,000 to Rs 40,000 in case of the mother machine and from Rs 20,000 to Rs 30,000 in case of additional machines
• An increase in the deposit for new applications for casinos from the existing Rs 5 lakh to Rs 10 lakh.