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Delhi Heading Towards Reduced Number of 5-Star Hotels

India Hotels in Delhi Allowed to Reopen

The Hotel and Restaurant Association of Northern India condemns the composite fee structure introduced in a new excise policy of Delhi.

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  1. The majority of hotel members have expressed their concern towards the new excise of Delhi which will be implemented with effect from November 17, 2021.
  2. The new fee structure will definitely affect the image of Delhi with a reduced number of 5-star hotels.
  3. Many hotels desire to declassify or get their rating changed to 4-star due to the newly introduced composite fee structure of 1 crore per annum.

As per the new excise policy, there is a complete disproportion of the fees. For hotels up to the two-star classification, the fee is INR 10 lakh and for three and four-star hotels, it is INR 15 lakh per F&B outlet. While the new L-16 license (5-star and above) is composite license of INR 1 crore which means a hotel with two outlets and another one having six outlets are being charged the same fees under composite scheme. The Banquets in a hotel have been treated a separate identity and a separate license (L-38) with a fee levied on the basis of carpet area (Rs 5,00,000 to Rs 15,00,000/- has also been demanded by the excise department.

The mandate of 24×7 licenses for service of liquor has also been included and enforced in the composite fee without considering the locality/area or demand of 24×7 liquor services and choice of licensee unit.

A number of representations has been sent to the Deputy Chief Minister who heads Finance also.  Meeting of stakeholder and delegation from the Association have met the Excise department to review the policy but there has been no positive response reported Renu Thapliyal, Secretary General, HRANI. It is pertinent to mention that Introduction of composite fees was neither proposed by the Excise Department nor included in draft of the excise policy issued for comments from the public/ industry added Renu.

The proposed composite fee structure is certainly going to affect the hotels with different sizes as units with a limited number of units will find it difficult to recover the cost of the license. There is a significant hike in license fee for all categories stated Garish Oberoi, Chairman, Delhi State Committee, HRANI.

“It is great that the composite license has been initiated by Government of Delhi but additional charges toward room service and then Annual license fees on banquet to the extent of Rs 15 lacs additionally completely defeats the composite license.  No neighboring state of Delhi has such exorbitant fees and implementation of such exorbitant fees will result in shifting of business to NCR and neighboring states,” added Mr. Oberoi. 

There is no clarity on liquor procurement till date. The hotels are facing challenges with the excise department web portal.  The industry is not clear on the liquor service and procurement for banquet events as the wedding season is already going on.

The hotel members have also informed the Association that as per the provision of the proposed policy, the guest who is consumer and wish to get liquor served in their functions/event will have to also take a temporary license of Rs 50,000/ – additionally and purchase the liquor from the assigned vend which means the guest will land up more towards liquor service. Such a policy will lead to a shift in banquet events outside Delhi.

As per the Delhi Govt Order No F.No 10 (39) ENV 2021/ 4941-4970 dated 13th November, 2021, all Govt offices of Delhi have been closed till 17.11.2021, therefore no clarification can be sought from the officials by the licensee hotels. The date of November 17, 2021, for implementation of policy should be extended by one month for hotels.

Since, Delhi is the gateway of India and to attract tourists coming to the city, we must adapt to the modern times and amend our policies to make them more liberal, practical and in par with international standards, with extended timings as allowed by other states.

The association hopes that the Government of Delhi will provide the capital, a more cosmopolitan and International feel to safeguard hospitality and tourism.

As per the Delhi Govt Order No F.No 10 (39) ENV 2021/ 4941-4970 dated 13th November, 2021, all Govt offices of Delhi have been closed till November 17, therefore no clarification can be sought from the officials by the licensee hotels. The date of November 17, 2021, for implementation of policy should be extended by one month for hotels.

Since, Delhi is the gateway of India and to attract tourists coming to the city, we must adapt to the modern times and amend our policies to make them more liberal, practical and in par with international standards, with extended timings as allowed by other states.

The association hopes that the Government of Delhi will provide the capital, a more cosmopolitan and International feel to safeguard hospitality and tourism.

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Anil Mathur - eTN India

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