Hotel body meets CM to rollback 5% VAT hike on alcohol

AHAR, the Indian Hotel and Restaurant Association, has met with government officials in Mumbai to request a rollback of the 5% increase in VAT on liquor. The association expressed concerns about job losses and the potential for increased alcohol sales in unregulated environments. The government has promised to hold a joint meeting with the finance ministry to address the issue. Bar owners are already reporting losses, and the association believes that government revenue will decrease as more people seek cheaper alternatives to buy alcohol.

Mumbai: After the state government increased the 5% Value-Added Tax (VAT) on liquor in November, a delegation of AHAR - Indian Hotel and Restaurant Association - met chief minister Eknath Shinde, deputy chief minister Devendra Fadnavis and excise minister Shambhuraj Desai and requested them to rollback the hike.

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The delegation, led by AHAR president Sukesh Shetty, tabled their concerns regarding the hike. Some of their major concerns include the lack of alcohol sales due to higher prices can lead to job losses in the industry and a fear that consumers and patrons may inadvertently seek out alcohol in alternative, potentially less regulated environments, creating a law and order problem.

According to the delegation, Eknath Shinde promised a joint meeting with the finance ministry in the next few days. AHAR president Sukesh Shetty, “We will represent the issue before them on behalf of AHAR.”

The AHAR delegation called on deputy chief minister Devendra Fadnavis, who asked the finance department to look into their concerns.

There are about 18,000 bars in Maharashtra and 5 lakh workers depend on them. These bars account for about 50% of the annual beer sales in Maharashtra of 33 crore litres and 30% of the annual sales of 8.5 crore litres of Indian Made Foreign Liquor (IMFL) of 28 crore litres. The wider impact of the 5% VAT hike will be assessed, said AHAR.

According to the association, bar owners have already started to suffer losses and they believe government revenue will also decrease as more and more people will seek alternative arrangements to buy alcohol at cheaper rates. “More emphasis will be placed on direct selling, thus reducing hotel visits, so restaurants will employ significantly more people than retailers,” said an AHAR spokesperson.