HRANI disappointed at the proposed annual excise fee hike in Haryana

New Delhi, March 11, 2015: Hotel & Restaurant Association of Northern India has expressed extreme disappointment at the decision of the Government to increase the annual excise fee in the state. 

The Government of Haryana doubles the amount of money needed by establishments to annually renew their licence. The excise policy of Haryana for the financial year 2015-16 has been announced today with increased license fees for Hotels & Restaurants.  

The fee for a bar license was Rs 6 lacs per annum across the state which has been increased to Rs 12.5 lacs for Gurgaon, Rs 10 lacs for Faridabad and Rs 7.5 lacs for other districts.

This hike is impractical and arbitrary. The hospitality sector will bear the brunt of the reduction in sales and the decision would result in small hotels & restaurants become much more expensive said Luv Malhotra, President, HRANI, adding, “We urge the State Government to order a rollback”.

“On one hand the Central Government has made visa easier for about 40 countries and plans to extend this to other countries and want to promote Tourism by facilitating a Single Window Clearance and simplifying procedures and on the other hand we increase the excise arbitrarily and such a steep hike would make eating out much more expensive after the increase of service tax and excise fee. Business is not as good in Gurgaon or Faridabad as people making these policies think, many establishments will close down with this steep hike. Haryana is the only state that permits AHATAS which is liquor vends to put tables and chairs and allows service of liquor outside the shop at a much lesser fees. These AHATAs are in direct competition with licensed bars and restaurants and unlike them donot have to spend on high rent air conditioned premises nor on decor and interiors, further adding competition to such premises. Haryana is the only state that allows this” said S.M. Shervani, Immediate Past President, FHRAI.

The hospitality sector is inherently capital intensive and more vulnerable to global cyclicalty and economic downturns. It is already reeling under pressure of plethora of taxes and multiple approvals, licenses and its fees, increased service tax by centre and now this exorbitant hike by state is aimed at ruining the business of bar and hotel owners in Haryana. 

The hotels & restaurants are operating at the bare minimum in the flattened economy and any increases would be passed on to consumers.

This hike will also act as a major disincentive for the public and visitors to spend money in the wider hospitality sector that remains a crucial part of the economy while simultaneously encouraging consumers to travel to neighbouring NCR to purchase alcohol.

The move is “disproportionate, excessive and absolutely contrary to the stated aim of Government to support small businesses”.