Hotel rooms and liquor in Indore, Madhya Pradesh are set to get expensive from July 1, 2012 as hotels will increase their tariff. Currently, hotels in the state charge 16.18 per cent of overall tax. It includes 6.18 per cent of luxury and 10 per cent of service taxes for suite rent per guest.
While, the service tax will remain unchanged at 10 per cent, the luxury tax will go up to 7.42 per cent against the existing 6.18 per cent. These rates will be applicable for suite rent up to Rs 1,999 per day. In case the suite rent goes beyond the mark, the tax component is down at 5.42 per cent. However, this rate will also go up to 7.42 per cent. Thus, the overall tax for such hotels will go up to 17.42 per cent. The overall tax on liquor services will rise from the existing 18 per cent to 19.55 per cent. The increase in tariff is attributed to hike in service tax to be levied by the government on hotels from July 1, 2012, said a source familiar with the development. The government has already jacked up taxes on hotel industry for three times in the past three months.
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While, the service tax will remain unchanged at 10 per cent, the luxury tax will go up to 7.42 per cent against the existing 6.18 per cent. These rates will be applicable for suite rent up to Rs 1,999 per day. In case the suite rent goes beyond the mark, the tax component is down at 5.42 per cent. However, this rate will also go up to 7.42 per cent. Thus, the overall tax for such hotels will go up to 17.42 per cent. The overall tax on liquor services will rise from the existing 18 per cent to 19.55 per cent. The increase in tariff is attributed to hike in service tax to be levied by the government on hotels from July 1, 2012, said a source familiar with the development. The government has already jacked up taxes on hotel industry for three times in the past three months.
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