Should Hotel and Restaurant Associations in Maharashtra Go on Strike?

Mumbai, July 12 (NationPress) The state's Excise Commissioner Rajesh Deshmukh has urged the president of the Hotel and Restaurant Association (AHAR), Sudhakar Shetty, to reconsider the planned shutdown on July 14. Instead of resorting to a strike, he advocates for resolving disputes through legal channels.

In a recent announcement, AHAR declared that over 20,000 bars and permit rooms throughout Maharashtra will cease operations on July 14 in response to a statewide bandh. This protest aims to highlight the unfair and excessive tax increases imposed by the Maharashtra government on the hospitality industry, which is worth around ₹1.5 lakh crore and is nearing a state of crisis.

Among the grievances is the increase of VAT on liquor from 5% to 10%, a 15% hike in annual licensing fees, and a staggering 60% rise in excise duty within a single year. AHAR describes this situation as a “triple tax tsunami” that has hit the industry in less than twelve months.

“The hospitality sector in Maharashtra is suffering immensely. Our appeals have gone unheard. On July 14, every bar and permit room in the state will close in protest. The bars of Maharashtra stand united against the government's harsh taxation,” stated Sudhakar Shetty, President of AHAR.

Shetty confirmed that members from Mumbai, Pune, Nashik, Nagpur, Amravati, Konkan, and other regions of Maharashtra have pledged full participation. The combination of these tax hikes and the challenges of post-COVID recovery has rendered the business model unsustainable for many establishments.

AHAR warns that this situation threatens to obliterate thousands of small to mid-sized businesses, leading to significant unemployment and an increase in illicit liquor smuggling from neighboring states.

“This is not merely an economic setback; it poses a fatal threat to an industry that greatly contributes to job creation and state revenue,” Shetty added.

“These severe tax increases are the final straw. Our very existence is at risk due to rising excise renewal fees, VAT, and excise duty. If the government does not retract these hikes, we anticipate mass closures and irreversible harm to Maharashtra’s hospitality sector.”

These substantial tax increases could also foster corrupt practices, which would lead to significant revenue losses for the government. The industry of 20,000 permit rooms and bars directly and indirectly provides employment for over 20 lakh individuals and supports a vast network of 48,000 vendors. It plays an essential role in Maharashtra’s tourism-driven economy, especially in cities like Mumbai and Pune, as noted by AHAR.

AHAR has expressed serious concerns about the timing of these tax hikes, particularly when the Central Government is collaborating with the World Bank to establish Mumbai as India’s premier tourist destination. “Instead of promoting growth, the state government appears determined to drive us out of business,” Shetty remarked.

AHAR has called on policymakers to urgently engage with the industry before the situation becomes irrevocable.

“We have exercised patience, waited, and made our requests. Now, we must make our voices heard through this bandh,” concluded Shetty.

The National Restaurant Association of India (NRAI), the Hotel and Restaurant Association (Western India), HRAWI, and various affiliated and non-affiliated associations in Maharashtra have all shown their support for the bandh on July 14.