In a major relief for restaurants and bars in the city, the state government has decided not to hike the annual licence fees for permit rooms.
The fees, which are at present around Rs6 lakh per annum, had badly affected the hoteliers and they had warned the government that any further hike will be disastrous for their business.
The Indian Hotel and Restaurant Association (AHAR) expressed satisfaction over the government decision.
“Our delegation met the excise department officials in January and explained to them that we are already facing a lot of problems in conducting business as we are having to shell out high fees. Any hike would have resulted in closure of many restaurants as there was no way we could absorb the added cost,” Adarsh Shetty, president, AHAR.
For years, the hike in licence fees for the permit rooms was an annual feature. The situation deteriorated in the past few years owing to overall increase in costs. A large number of hotels and restaurants that could not bear the high costs have closed down over the years. In 2014, the state government hiked the excise licence fees by a staggering 50% as it was hiked to Rs6 lakh from Rs3.62 lakh.
According to hotelier Naresh Shetty, who did not renew his permit room licence, it was an unviable proposition. “It is just not a licence fee but other costs like salaries, rents, electricity bill, BMC charges as well as material costs involved which have now touched the sky. You cannot run a hotel with such exorbitant costs,” he said.
In the last few years, the Hotels and Restaurants have been facing through a rough phase due to high license fees and labour issues. Hundreds of hotels and restaurants in the city had to shut down due to these problems.