New tax has Haryana hoteliers sweating

The hospitality and entertainment industry in Gurgaon is up in arms against the imposition of 25% entertainment tax on income from ‘allied’ activities, reports SK Ahuja.

The hospitality and entertainment industry here is up in arms against the imposition of 25 per cent entertainment tax on income from ‘allied’ activities. Activities include sporting facilities like billiards, bowling, and golfing.

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The tax would be imposed retrospectively, with effect from 1998, so the initial burden on hoteliers and restaurant owners would be enormous.

Hoteliers claim this step would force many of them to shut shop, leading to a serious shortage of rooms during the 2010 Commonwealth Games.

However, the Haryana excise and taxation department maintained businesses would have to pay up, as they had lost their case against the state government even in the Supreme Court. “We have been demanding the entertainment tax since 1998, but they kept evading it by taking the matter to court,” said a excise and taxation official.

“Some of us have never charged customers for these services. How can we suddenly bear such a huge burden, especially in the midst of an economic slowdown?” said Manbeer Choudhary, President of Hotel and Restaurant Association of Haryana. Ranjit Goel, Chief Managing Director of Best Western Resort Country Club, said, “Our revenues have come down 40 per cent.”