Rajasthan CM Vasundhra Raje in State Budget 2014 have announced that the luxury tax of royal heritage hotels and reorts in the state will be reduced to 5% which will help in boosting tourism sector.
Chief minister Vasundhara Raje’s proposal to reduce taxes on heritage hotels is seen as an attempt to revive tourism that has been traditionally the backbone of the state’s economy.
In the budget announced on Monday, Raje reduced VAT for basic category of heritage properties from 14% to 5%. This segment of properties constitutes majority of heritage properties, although there are many hotels in ‘Classic’ and ‘Grand’ categories.
In order to encourage rural tourism, she has exempted all guest houses with up to five rooms from luxury tax. Rural Rajasthan is dotted with small, old havelis and the move will see owners of such properties converting them to guest houses.
“The average room occupancy in heritage hotels is between 35%-40% compared to about 55% for modern properties. The reduction in VAT is expected to benefit a large number of heritage hotels in the state and boost tourism,” said Randhir Mandawa, general secretary of the Indian Heritage Hotels Association.
Src- http://timesofindia.indiatimes.com/business/india-business/Reducion-in-tax-on-heritage-hotels-to-boost-tourism/articleshow/38447136.cms