Service tax hike will hit hotel industry, says panel

A parliamentary standing committee has warned that the recent hike in service tax would “adversely affect” the hotel industry in the country.

In its report tabled in Parliament recently, the panel observed that India already had a higher hotel tariff due to multiple tax regimes of states and the Centre.

“The additional burden on hotel, restaurant and transportation will discourage the middle class tourists, both domestic and foreign, from visiting tourist places,” the panel added. 

Finance Minister Arun Jaitley recently proposed a hike in service tax from 12.36 to 14 per cent while presenting Union budget proposal for 2015-16 in Parliament.

The parliamentary standing committee in its report took note of the “multiple taxes” charged by both Central and the state governments on the same service or tourism products offered.

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