Maha bars, permit rooms observe bandh today in protest against tax hike

Mumbai, July 14 Over 20,000 bars and permit rooms across Maharashtra under the aegis of Hotel and Restaurant Association (AHAR) will shut operations on Monday as part of a statewide bandh in protest against the Maharashtra government's recent decision to hike taxes on the hospitality sector.

AHAR is protesting against VAT on liquor hiked from 5 per cent to 10 per cent, a 15 per cent increase in annual license fees and a 60 per cent spike in excise duty in one year.

The bandh is a reaction to a “triple tax tsunami” that has struck the industry in less than a year, said Sudhakar Shetty, President, AHAR. He added that these tax hikes are pushing the Rs 1.5 lakh crore industry to the edge of collapse.

“The entire hospitality sector in Maharashtra is bleeding. Our pleas have fallen on deaf ears. On July 14, every bar and permit room in the state will be shut in protest. Entire Maharashtra bars are shut against the state government's draconian taxation,” said Shetty.

He added that members across Mumbai, Pune, Nashik, Nagpur, Amravati, Konkan and the rest of Maharashtra have confirmed full participation. These hikes, clubbed with ongoing post-Covid recovery challenges, have rendered the business model unviable for thousands of establishments.

AHAR has warned that this will not only wipe out thousands of small and mid-sized businesses but also lead to mass unemployment and a black market surge in liquor smuggling from neighbouring states.

“This is not just an economic blow; it is a death blow to an industry that contributes significantly to employment and state taxes,” said Shetty.

“These draconian hikes are the final nail in the coffin. From excise renewal fees to VAT and excise duty, our survival is at stake. If the government does not roll back these hikes, we fear mass closures and irreversible damage to Maharashtra’s hospitality landscape.” These huge hikes in various taxes are likely to encourage more corrupt practices, resulting in a sharp revenue loss to the government as well.

The 20,000-strong permit rooms and bars industry directly and indirectly employs over 20 lakh people, and supports a wider ecosystem of 48,000 vendors. The industry also plays a vital role in Maharashtra’s tourism-driven economy, especially in cities like Mumbai and Pune. AHAR has raised serious concerns over the timing of these hikes, especially when the Central government, with World Bank collaboration, is working to position Mumbai as India’s leading tourist destination, said the release.

“Instead of incentivising growth, the state government seems determined to shut us down,” said Shetty.

AHAR has urged policymakers to engage with the industry urgently before the damage becomes irreparable. “We have shown restraint, we have waited, and we have appealed. Now, we are forced to make ourselves heard through this bandh,” said Shetty.

National Restaurant Association of India (NRAI), Hotel and Restaurant Association (Western India) HRAWI, and all affiliated as well as non-affiliated associations of hotels and Restaurants in Maharashtra have extended their support to the Bandh.

Earlier, State Excise Commissioner Rajesh Deshmukh on Saturday appealed to the AHAR President Sudhakar Shetty not to go on a day-long strike. He has suggested resolving their issues through legal means instead of a day-long strike.

State excise duty and taxes are one of the major sources of the state’s revenue, and during 2024-25, it has mobilised Rs 32,575 crore. The government has estimated that its decision made in June about an increase in excise duty and taxes with help it mobilise additional Rs 14,000 crore annually.

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