The state is said to have suffered a loss of around Rs80 crore in a day as restaurant bars observed a strike against the state’s decision to increase excise duty by a whopping 60%. The hotel and bar association protested against the tax hike by either keeping the bars shut or not serving alcohol to the customers for a day.
On June 10, the Maharashtra Cabinet approved a hike in liquor rates across the state to generate an additional Rs14,000 crores annually through increased excise duty and taxes. The hospitality industry in Maharashtra is feared to collapse due to the tax hike as the change is expected to increase the retail price of liquor by an average 60%. The industry is also protesting against the increase in annual license fees as well as value added taxes on Indian-made foreign liquor (IMFL) in the past year.
Alleging back to back financial blows to the hospitality industry, the Indian Hotels and Restaurant Association (AHAR) had called for a statewide bandh on Monday. More than 20,000 bars and permit rooms remained shut in a united show of solidarity to protest against steep taxation on the hospitality industry. According to industry sources, the one-day strike is expected to have caused a loss of Rs80 crores to the state government in form of excise tax.
The bandh was observed peacefully across all major cities and towns, including Mumbai, Navi Mumbai, Vasai, Thane, Mira Road, Kashimira, Bhiwandi, Pune, Nagpur and Aurangabad among others. Peaceful protest marches were carried out by the Vasai Taluka Hotel Association, Restaurant and Bar Association of Chandrapur and Navi Mumbai Hotel Owners’ Association.
Sudhakar Shetty, president of AHAR, said, “This is not just a bandh but a strong signal to the government that the current tax regime is unsustainable for our industry. We urge the authorities to initiate immediate dialogue to address our concerns.”
According to the Hotel And Restaurant Association of Western India (HRAWI), more than 90% of the hotel bars suspended their liquor service in the statewide strike. It claimed that the consequences of this steep hike will be devastating for smaller bars with less than 25 tables which serve the lower economic segments as the cost of popular Indian-made foreign liquor is expected to shoot up to nearly 50%.
“Today’s unified response to the 'Bar Bandh' and 'No Alcohol' call across Maharashtra is a clear reflection of the deep distress felt by the hospitality industry. If the state government does not urgently rationalise the excessive hikes in excise duty, VAT, and license fees, we fear that thousands of small license holders will be forced to surrender their licenses, leading to mass closures and job losses,” said Jimmy Shaw, president of HRAWI.
Maharashtra Cabinet expects to generate an additional income of Rs14,000 crore annually through the hike
The revised structure includes:
An increase in the duty on Indian-made foreign liquor (IMFL) from 3% to 4.5%
Excise duty on country liquor to increase from Rs180 to Rs205 per litre
The change is expected to increase the retail price of liquor by an average 60%
New Minimum Retail Prices For 180ml Bottles:
Country liquor- Increased by 14.28% from Rs70 to Rs80
Indian-made foreign liquor (IMFL)- Increased by 70.83% from Rs120 to Rs205
Premium foreign liquor- Increased by 9% from Rs330 to Rs360
Maharashtra-made liquor (newly introduced)- cost will start from Rs148
The hospitality industry in Maharashtra comprises of over 20,000 legal permit rooms and lounge bars
The number is growing at an annual rate of 8%
It directly employs more than 4 lakh individuals and supports around 48,000 vendors
Approximately 18 lakh people are indirectly dependent on this sector for their livelihoods
