Economy Apr 4, 2012
Panaji: Vacation in Goa during the monsoon season would be cheaper now, as the hotel industry here is designing attractive packages following the concessions provided by the state government.
The Manohar Parrikar-led BJP government has offered 50 percent concession on the luxury tax to mid-and-upper-segment hotels during the off season - from May 1 to September 30. The tourism and trade industry has said the move will help them mitigate the hike in air fares which had made off- season packages expensive.
Chief Minister Manohar Parrikar, who is also the state Finance Minister, proposed in the annual state Budget that all hotels are granted 50 percent concession of tax payable during the off-season, subject to prompt payment of tax and filing of returns in time.
Travel and Tourism Association of Goa (TTAG), which has been lobbying for such concessions, said the move will help in making monsoon package more attractive, as the skyrocketing air fares had forced the off-season packages to be expensive. "The hoteliers will be able to pass the benefit of concession directly to the customers," TTAG spokesman Ralph D'Souza said.
Market estimates reveal that around 1,500 medium and big hotels will gain from the incentives, while smaller hotels are exempted from paying luxury tax.
The sops will also spare the hotel employees from facing lay-offs during the off season.
The hotels that offer a room for Rs 500-Rs 1,500 are imposed five percent tax; those providing a room at Rs 1500 - Rs 3,000 are charged eight percent tax, while the hotels that charge above Rs 3,000 per room, have to pay 10 percent tax during the peak season. Officials from state commercial taxes department said that luxury tax of Rs 130 crore is collected from these hotels annually but with the concession, the tax collection will drop by Rs 25-30 crore.
Last year's off-season was blessed with the long weekends, which saved the industry from facing losses, D'Souza said, adding that the average occupancy was around 75 percent during weekends and approximately 60 per cent during the week days.
The Goa Chamber of Commerce and Industry (GCCI) has termed this reduction as a "smart move", which will keep economy vibrant even during the off-season. "The state will lose on the luxury tax but certainly will gain on the taxes paid by the tourists on other commodities. For example, they will buy certain things in Goa, eat in the restaurant and spend here, which will bring taxes back to the state coffers," GCCI President Manguirish Pai Raikar said.
More From Firstbiz.