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Delhi Wine Club

Posted: Tuesday, January 12 2010. 14:05

Select Hotels Get Tax Rebates during Games

After a cabinet meeting yesterday, Sheila Dixit, Chief Minister of the Delhi government announced the exemption from payment of luxury tax to hotels providing accommodation to delegates and technical experts during the Commonwealth Games in October this year, while no decision on the reduction of excise duties on imported wines is forthcoming.

According to a report by IANS, the exemption will be provided for a month from September 16 to October 16, 2010 on hotel accommodation booked by the Commonwealth Games Organizing Committee for delegates from the Commonwealth Games Federation, member countries of the Commonwealth Games Associations, technical experts of International Sports Federations and broadcasting/media right holders for the games.

Dikshit said the decision has been taken as per the ‘Host City Contract’ which says it will use all reasonable endeavours to minimise the imposition of taxes on the import of supply and equipment required by the Commonwealth Games Federation, Commonwealth Games Associations and accredited representatives.

A logical though optimistic deduction might have been the reduction of excise duties on wine at this time. This fiscal year saw the government, emboldened by Maharashtra’s earlier protectionist excise duty policy, increased the excise duties on imported wine from Rs. 150 a bottle to slab duty of 30/20%. Maharashtra in the meanwhile, had reduced the duties to sensible level of around Rs.200-300 a bottle, seemingly due to the cajoling from the central government which is under huge pressure from EU and WTO for elimination of extra excise duties. The Delhi government is expected to take the logical decision of excised reduction soon.

The move to exempt luxury tax for rooms is being criticized by the hospitality industry which calls it discriminatory by hotel owners and industry associations. Calling the proposed move ‘fraction of good news’ for the industry, Rajindera Kumar, President, Federation of Hotel & Restaurant Associations of India (FHRAI), feels that the exemption should be given to all bookings irrespective of the source.

Hotel & Restaurant Association of Northern India (HRANI) also criticised the government’s ‘partial exemption’ move. Speaking to Hospitality Biz which reported the news, Vijay Pande, President, HRANI said, “The Delhi government is discriminating against smaller and budget hotels in the city through this move. This will only benefit big hotels in the city who will bag direct bookings through the Games Committee,.”  Adding that the move would also ‘demotivate’ domestic tourists from visiting the city during the Games.


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