Goa govt told to recover illegal luxury tax exemptions given to 7 hotels

The government has been granting exemptions in luxury tax for luxuries provided in a hotel during the months from June to September every year since April 2013.

The Goa government has granted luxury tax exemptions to seven hoteliers to the tune of ₹1.45 crore despite them being “ineligible” for the same, said the Comptroller and Auditor General, recommending that the state recover the difference.

Goa chief minister Pramod Sawant (HT Photo)

In its report tabled before the Goa assembly, the CAG found that seven hotels were granted exemptions in luxury tax between December 2017 and November 2018, resulting in a short levy of luxury tax of ₹1.45 crore by irregular grant of exemptions.

The government has been granting exemptions in luxury tax for luxuries provided in a hotel during the months from June to September every year since April 2013. The exemptions are granted provided the hotelier holds a valid registration certificate, files the returns within the specified time, pays all taxes within the time prescribed under the Act and should not have tax arrears or other dues.

“Scrutiny of assessment records of two luxury tax offices revealed that though the payment of tax was delayed by five hoteliers and there were undisputed arrears in respect of two hoteliers [the] Luxury Tax Offices allowed the luxury tax exemptions while finalising the assessments. This resulted in a short levy of luxury tax of ₹1.45 crore by irregular grant of exemption as detailed below,” the CAG said in its report.

“We observed that the Luxury Tax Office Panaji while finalising the assessments of five hoteliers levied interest for delays in payment of taxes. It indicated that the office was aware of facts that the tax payment was delayed by these hoteliers despite that the exemption was allowed,” the CAG report added.