Why Are Maha Bars and Permit Rooms Shutting Down Today in Protest?
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Synopsis
Over 20,000 bars and permit rooms in Maharashtra are closing today to protest significant tax hikes imposed by the state government. This action, organized by the Hotel and Restaurant Association (AHAR), highlights the growing distress within the hospitality sector, which is facing severe financial challenges.
Key Takeaways
- Over 20,000 bars and permit rooms are participating in the bandh.
- Tax hikes include VAT on liquor and excise duties.
- AHAR warns of mass closures and unemployment.
- The hospitality sector employs over 20 lakh individuals.
- Support from various industry associations for the bandh.
Mumbai, July 14 (NationPress) More than 20,000 bars and permit rooms across Maharashtra, organized by the Hotel and Restaurant Association (AHAR), will cease operations today as part of a statewide bandh. This action is a response to the Maharashtra government's recent tax hikes impacting the hospitality sector.
AHAR is voicing its concerns against the increase in VAT on liquor, which has risen from 5% to 10%, along with a 15% hike in annual license fees and a staggering 60% increase in excise duty within just one year.
The bandh is deemed a reaction to a “triple tax tsunami” that has hit the industry in less than a year, according to Sudhakar Shetty, President of AHAR. He emphasized that these tax increases are pushing the Rs 1.5 lakh crore industry to the brink of collapse.
“The entire hospitality sector in Maharashtra is suffering. Our requests have gone unheard. On July 14, every bar and permit room across the state will close in protest against the government’s oppressive taxation policies,” Shetty stated.
He confirmed that establishments in Mumbai, Pune, Nashik, Nagpur, Amravati, Konkan, and other regions of Maharashtra will participate fully. These tax hikes, compounded by ongoing challenges in post-Covid recovery, have rendered many businesses unviable.
AHAR warns that this situation could lead to the elimination of thousands of small and mid-sized operations, resulting in mass unemployment and a potential surge in black market liquor smuggling from neighboring states.
“This is not merely an economic setback; it poses a serious threat to an industry that significantly contributes to employment and state revenues,” Shetty expressed.
“These harsh tax increases are the final straw. Our existence is at risk from excise renewal fees to VAT. If the government does not retract these hikes, we fear widespread closures and irreversible harm to Maharashtra’s hospitality sector.” Such substantial increases in various taxes may also foster corrupt practices, leading to a significant revenue loss for the government.
The industry, which encompasses 20,000 permit rooms and bars, employs directly and indirectly over 20 lakh individuals while supporting an extensive ecosystem of 48,000 vendors. It plays a crucial role in Maharashtra’s tourism-driven economy, especially in cities like Mumbai and Pune. AHAR has raised serious concerns regarding the timing of these hikes, especially as the Central government, in collaboration with the World Bank, aims to position Mumbai as India’s premier tourist destination.
“Rather than fostering growth, the state government appears intent on our downfall,” Shetty remarked.
AHAR urges policymakers to engage with the industry promptly to prevent irreversible damage. “We have exercised patience, awaited responses, and pleaded for dialogue. Now, we have no choice but to make our voices heard through this bandh,” Shetty declared.
The National Restaurant Association of India (NRAI), Hotel and Restaurant Association (Western India) HRAWI, along with all affiliated and non-affiliated associations of hotels and restaurants in Maharashtra, have pledged their support for the bandh.
Earlier, State Excise Commissioner Rajesh Deshmukh requested AHAR President Sudhakar Shetty to refrain from a day-long strike, suggesting that issues could be resolved through legal avenues instead.
State excise duties and taxes represent one of the key sources of the state’s revenue, having generated Rs 32,575 crore in the fiscal year 2024-25. The government anticipates that its recent decisions regarding increased excise duties and taxes will yield an additional Rs 14,000 crore annually.
Point of View
It’s crucial to recognize the economic ramifications of these tax hikes. While the government seeks to bolster revenue, the hospitality sector's survival is at stake. A balanced approach is necessary to ensure that the interests of both the state and businesses are safeguarded, preventing long-term damage to an essential industry.
NationPress
14/07/2025
Frequently Asked Questions
What prompted the bandh by bars and permit rooms in Maharashtra?
The bandh was prompted by significant tax hikes on the hospitality sector, including a rise in VAT on liquor and increased excise duties.
How many establishments are participating in the bandh?
Over 20,000 bars and permit rooms across Maharashtra are participating in the bandh.
What are the potential consequences of these tax hikes?
The tax hikes could lead to mass closures of small and mid-sized businesses, significant job losses, and an increase in black market liquor smuggling.
What support has AHAR received for the bandh?
AHAR has received support from various associations, including the National Restaurant Association of India, emphasizing the collective concern over the tax increases.
What is the economic contribution of the hospitality sector in Maharashtra?
The hospitality sector significantly contributes to employment in Maharashtra, directly and indirectly employing over 20 lakh people and supporting a network of 48,000 vendors.
