The State government should come out with some policy initiatives and consider the demands of the hotel industry to promote tourism, say industry representatives.
The hotel industry is particularly exercised over the high excise licence fee.
It is the same for a retail outlet with permit room and star hotels, says vice-president of Hotels and Restaurants’ Association of Andhra Pradesh, Visakhapatnam chapter, P.C. Rau.
Retail outlets manage with minimum workers and concentrate on volume of business. For five-star hotels, on the other hand, opening a bar is mandatory under Union Government’s tourism policy to attract foreign guests, points out Mr. Rau.
“Star hotels are meeting the requirement, but not making profits, and hence the fee of Rs.41 lakh, the highest in the country, is not justified,” he said.
Even in Hyderabad, it was Rs.33 lakh, he said.
“Clubs, on the other hand, have a relatively much less fee. With hotels set up with high investments and employing, on an average, 250 people and limited customers, the fee is too high,” he said.
Mr. Rau, general manager of Four Points by Sheraton here, demanded that a separate and uniform excise licence slab be announced for hotels of three-star and above categories.
He also urged the government to do away with multi-taxation.
Even complimentary breakfast is taxed. There are different taxation slabs for various services offered in the hotels and it should be made uniform, he says.
Besides, the Commercial Taxes Department was objecting to input tax credit on LPG, which hotels buy at commercial rate, Mr. Rao said. The exemption given to a multi-national company making food items in Hyderabad should be extended to hotels too, he urged.
Ever-increasing power tariff is also a problem.