'Withdraw the New Tax Rule'

Published: 25th May 2015 06:03 AM  |   Last Updated: 25th May 2015 06:03 AM   |  A+A-

KOCHI:The Kerala Homestay and Tourism Society (K-HATS)  has urged the Department of Local Self Government to withdraw the ‘extraordinary’ gazette notification allowing local bodies to levy tax up to Rs 60/square metre on homestay facilities.

K-HATS office-bearers submitted a memorandum to the Tourism Minister, seeking his intervention in the issue. “As per the LSG Department’s decision, a local body can collect tax of Rs 30-60/square metre from an entrepreneur. This has come as a severe  blow to homestay operators who are already struggling for survival,” said K- HATS director M P Sivadathan.

“As per the new rule, an entrepreneur who owns a 2,000-square metre building will have to pay a tax of Rs 1.2 lakh. It is the discretion of the respective local body to fix the tax, ranging from Rs 30 to Rs 60. It is in addition to the 0.5 per cent luxury tax set by the the Department of Finance. In short, the government departments  have joined hands to kill an industry,” he said.

“A homestay owner will not be issued ownership certificate if he does not pay the tax. It is also pointed out that the new rule could lead to corruption. Since the local bodies are given the right to fix the tax, the officials may be offered bribe to reduce the tax,’’ said Sivasdathan.

“As per statistics available with the K-HATS, the number of licensed homestays is coming down every year - to around 350  from 800 in 2014. In many cases, the reason for entrepreneurs leaving the sector is the unfriendly attitude of the government,”  he added.

The Kerala State Homestay and Tourism Association (KeralaHATS) is a consortium of homestay operators and tourism promoters working for the effective coordination of  tourism activities in Kerala.


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