Hospitality Sector Protests 60% Excise Duty Hike, Doubling of VAT on IMFL, and 15% Increase in Licence Fees
The National Restaurant Association of India (NRAI) has extended its full support to the statewide bandh called by Maharashtra’s hospitality industry on Monday, July 14, in protest against the government’s steep and sudden increases in liquor taxation and licensing fees.
As part of this coordinated protest, more than 20,000 bars and restaurants across Maharashtra will halt alcohol service for the day. The action responds to the recent 60% increase in excise duty, a VAT hike on IMFL from 5% to 10%, and a 15% annual rise in licence renewal fees for the upcoming financial year.
“The hospitality industry is still recovering from the pandemic’s long-lasting impact. These abrupt and excessive tax hikes feel like financial suffocation,” said Sagar Daryani, President, NRAI. “Irrational policy decisions like these will not only strain restaurants and bars but also adversely affect employment, consumer confidence, and investor trust in Maharashtra’s F&B ecosystem.”
Daryani warned that the combined effect of these three tax increases could prove disastrous for the sector, potentially endangering the livelihoods of over 2 million people employed directly and indirectly in the hospitality and food service industries across the state.
The NRAI also cautioned that such measures may lead to:
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A surge in illicit liquor sales
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A decline in tourism revenues
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A drop in legitimate alcohol sales
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Long-term planning instability for businesses due to unpredictable policy shifts. “Cities like Mumbai and Pune are not only hospitality hubs of Maharashtra but also premier culinary and nightlife destinations in India,” said Pranav M. Rungta, Vice President, NRAI. “Drastic and arbitrary tax hikes risk damaging compliant businesses, reducing employment, and driving consumers to unsafe, unregulated alternatives.
