The Delhi Government’s Excise, Entertainment & luxury Tax Department has started collecting data about all hotels, gymnasiums, spas and banquet halls which have not been paying luxury tax in the national Capital. The Excise Department has written letters to Trade & Taxes, Tourism and the local police to provide details about hotels, spas, gyms and private banquet halls registered with them.
The department has reportedly set up 11 teams to carry out a detailed survey about all such commercial entities in the city. The Excise Department is also seeking details regarding the room occupancy status to understand causes of low booking. While economic recession is cited as one common reason for fewer tourists and business travellers, it is also felt that with more hotels coming up in the National Capital Region (NCR), the business traveller has a greater choice and prefers to stay closer to his place of conference or work.
At present, there are only 1,150 hotels that have been paying luxury tax. These include 105 three-star and plus hotels. Only those hotels which charge over `750 for a room a day are bound to pay 3 per cent luxury tax. Hotels charging `1,000 per room per day have to cough up 10 per cent entertainment tax. Other establishments like spas, banquet halls and gyms, whose annual turnover is above `5 lakh, are bound to pay only 3 per cent luxury tax.
Sources in the Excise Department said on Tuesday that hotels, gyms, spas and banquet halls have mushroomed in the national Capital. “I am quite sure that many of them are avoiding paying luxury tax. But we are going to be strict with those who are avoiding payment of taxes under this head.”
The administration had collected `305 crore luxury tax in the previous financial year. “We have to meet the target of `400 crore this year. And I am sure we are going to achieve our target,” informed sources.
Officials said that the Excise Department has asked police and other departments concerned — with which these commercial entities are registered — to provide details to the Excise Department. “So far we have not received any input from any of these agencies.”
According to officials, the Excise Department has set up 11 teams, each comprising three to four officers, to do a thorough inspection of these commercial entities in all the districts in the city. “The teams have been directed to carry out a field survey of all such commercial establishments. They have been told to create a databank along with the photographs of all such business houses.”
The Commissioner said once the department gets the details about these commercial entities, it would ask them to get registered to avoid legal action. “We will carry out the assessment of their accounts to check whether they are bound to pay the luxury tax.”
A senior official said that all efforts were being made by the administration to ensure no business house escapes paying luxury tax. “Those who do not get themselves registered with us will be served notices. If need be, we may even take strict legal action against the violators.”