Hospitality industry shaken and stirred with excise ministry's plan to increase permit room licence cost by 10 per cent
Hospitality industry shaken and stirred with excise ministry's plan to increase permit room licence cost by 10 per cent
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Don't be shocked the next time your martini costs you more. You may also have to downsize their 60-ml peg to a 30-ml peg with the prices of alcohol served at hotels ready to soar. 
The state excise department is planning to increase the permit room (FL-III) licence fee by 10 per cent across the city leaving the hospitality industry fuming and threatening to push the costs on customers, if the plan is not revoked.
Low spirits
Bar owners are grumbling that the smoking ban and inflation have already affected the industry, pushing several bar owners out of business and the increase in the tax structure will only be an added burden for them to shoulder.
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Sudhakar Shetty, president of Indian Hotel and Restaurant Association (AHAR) said that the ban on smoking in public places has already made matters worse for them and owing to this they have been experiencing low footfalls.
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"The hotel industry is already reeling from inflation and cannot absorb this annual hike. This added licence fee is going to burn a deep hole in our pockets," said Shetty.
The FL-III licence also known as the permit room licence is mandatory for all establishments to serve liquor.
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Every pub, bar and club which wishes to serve alcohol to its patrons must obtain an FL-III licence from the respective excise ward office.
Shetty explained that they have requested the excise ministry to reconsider the change in the tax structure but, they have received no reply from the ministry.
A pub owner from Juhu said, "The government should increase the licence fee by 5 per cent every year as they do for other districts out of the city. It is injustice to our patrons and to us."
Shetty further added that the hike of 10 per cent is too much for the industry to absorb. "Several hotels have shut down or are on the verge of closing because of the constant rise in prices.
The government should take some action before the entire industry disappears."
Sukesh Shetty, owner of Pratiksha restaurant at Mumbai Central echoed the same sentiments, said, "It is a known fact that inflation and rise in petroleum prices have already eaten into our share of profits.
Customers, who used to have tea worth Rs 12 thrice a day have cut down their consumption to once causing a loss to the owner."
He further elaborated that more than 150 eateries in SoBo have either closed down or have given their place out on rent, as they were unable to make any profit.
"From labour costs to real estate prices, everything is skyrocketing. How will a small restaurant or bar exist? The government needs to understand that ultimately the consumer will have to bear the brunt."
Price Rise
The licence fee is Rs 3.33 lakh per year. However, if the rise in the tax is implemented the licence fee would be u00a0Rs 3.63 lakh per annum.u00a0
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