The Tourism Department of Maharashtra plans to provide exemption from luxury and entertainment tax to hotels and tourist facilities that have come up since 2006. Across the State, 188 hotels are to gain with this decision.
In Mumbai, luxury hotels such as the Trident and Sofitel, located at the Bandra-Kurla complex; Westin in Goregaon; Ramada in Navi Mumbai and Holiday Inn at Andheri are set to get exemptions.
In Nagpur, hotels such as Sun and Sand and Ashoka are also set to get the tax benefits.
In order to provide the exemptions, the entire State has been divided into three zones. Cities such as Mumbai, Navi Mumbai, Thane, Pune and Pimpri are to come under zone A. All municipal corporations (excluding areas in zone A) would be in zone B, while the rest of the areas of the State would be in zone C.
A senior official of Maharashtra Tourism Development Corporation told Business Line , on the condition of anonymity, that in 2006, the department had come up with a new tourism policy to provide incentives to the tourism and the hospitality sector in the State. It had laid out a number of tax breaks, but the provisions in the policy were unacceptable to the Finance Department, as it would have led to lower tax collection.
As a result, the tax breaks were not implemented for the last seven years. Since the current policy is valid till 2016, the tax breaks would now be made available for the next three years, the official said.
A meeting is scheduled to be held with the Chief Minster and the exemptions would be announced shortly, the official said.
Compensation
“Based on our policy, a number of hotels and tourism projects were set up but they never got the benefit. Now, we want to compensate for their losses. The loss in terms of taxes would be about Rs 100 crore, which can absorbed by the State Government,” the official said.
Hotels located in B and C zones would have complete exemption from luxury tax, while those in zone A would get 50 per cent exemption. There would be total exemption from entertainment and amusement tax for tourism facilities located in all the three zones, the official said.
Moreover, stamp duty would be completely waived off in B and C zones, while zone A would have to pay 50 per cent of the duty, the official added.